Whistleblower petitions High Court over city moneylender harassing borrowers with fake license

Kampala, (UG):- A legal storm is brewing over an alleged fraudulent money lending operation, implicating a city lawyer and raising questions about regulatory oversight.

At the centre of the controversy is Wasswa Joseph Buyondo, a moneylender operating under Target Financial Services, whose license was reportedly confiscated by the Resident District Commissioner (RDC) of Mityana for being fake, but continues to pursue legal action against borrowers, allegedly with the help of lawyer Martin Musigire of LMN Advocates.

In a formal letter to the Principal Judge of the High Court, the complainant only identified as N. Ojambo accuses Buyondo of using a “fake/forged/Nasser Road made money lending licence” to conduct business in 2023.

The complainant further claims that after verification, the Mityana RDC confiscated the fraudulent license, preventing Buyondo from continuing his alleged exploitation of market vendors.

However, instead of ceasing operations, Buyondo allegedly changed tactics by hiring lawyer Martin Musigire (contact: 0700134925) to file civil suits at the Mengo Chief Magistrate’s Court against borrowers. Ojambo contends that the cases filed do not include a valid money lending license as required by law.

“When litigants ask for the money lending certificate, he is evasive,” Ojambo wrote, referring to Musigire. “Even when we ask the magistrates to cause the money lender to produce the money lending licence, we are not being helped.”

Judicial Intervention Sought

Ojambo, who is also facing legal action from Buyondo, is now appealing to the High Court to intervene, insisting that all case files should include a verified copy of the money lending license.

“Lending money with a forged money lending licence is both illegal and criminal,” the letter states. The complaint also calls on the Law Council to investigate lawyer Musigire for knowingly representing a client who lacks a legal money lending license.

Ojmabo’s case puts a spotlight on regulatory weaknesses in Uganda’s money lending industry. Authorities have long battled unlicensed lenders, with reports of forged licenses and predatory lending practices.

In 2021, the Uganda Microfinance Regulatory Authority (UMRA) warned the public against dealing with unregistered lenders, citing fraud risks. In 2023, the government suspended the issuance of new money lending licenses, citing concerns over abusive debt collection practices.

Recently, the Bank of Uganda has also raised concerns about the rise of unlicensed digital lending apps, many of which operate outside regulatory frameworks, charging exorbitant interest rates and using unethical recovery methods.