KAMPALA, UGANDA: Uganda Police has warned moneylenders confiscating identification documents such as National IDs and Permits from borrowers in the guise of using them as loan collateral to cease from the practice immediately.
The development followed an outcry from Ugandans over the continued practice by micro-loan lenders who seize their IDs depriving them of the privilege to use them for identification purposes.
During a Monday press briefing, Police Spokesperson Fred Enanga revealed that it had become a habit among money lenders to give out micro-loans and confiscate national identification cards from those who don’t have security.
Increasing cases of the practice according to Enanga had become common in Buwenge, Jinja district; Dokolo and Amolatar districts in the Lango sub-region and the greater Kampala area.
Enanga said national IDs have no economic or financial value therefore, it must be used exclusively for identification purposes.
“Any act of confiscation, taking or handing over national ID as collateral is criminal because it denies the owner the ability to use it for identification purposes and other transactions where it is required including movement while traveling,” Enanga said.
“In their guidelines, a money-lender shall not take a National ID, passport, warrant card, or other documents establishing the identity or nationality of the holder, bank savings, ATM cards and security codes for the ATM cards, as collateral for money borrowed,” he added.
The police spokesperson clarified that confiscating or taking or handing over national ID as collateral is criminal as it denies the owner the ability to use it for identification purposes and other transactions where it is required including movement while travelling.
“For instance, under the Registration of persons act section 77b, it is an offence if a person who is not authorised deprives or disposes of the holder of a national ID and also unlawful for a person to unlawfully take possession of any ID that belongs to another person.”
He further called upon anyone whose National ID was used as collateral or confiscated to report to the nearest police for further assistance, adding that police will now carry out raids on money lenders’ offices to search for ID cards and those who will be found in possession of them shall be charged in court.
“Money lenders should converse themselves with regulatory dos and don’ts by the Uganda Microfinance Regulatory Authority,” Enanga concluded.
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