Zombo money lenders ordered to return confiscated IDs
“Many clients are failing to take back their IDs. However, we are now ready to return them as directed,” Musinguzi stated.
Zombo: Money lenders in Zombo District, who have been holding hundreds of national identity cards as collateral for loans, have been directed to return them to their owners immediately.
The directive was issued on March 19, 2025, during a meeting convened by the Zombo District Security Committee with financial money lenders in Paidha Town Council. The meeting aimed to harmonize the lenders’ operations with the community in accordance with existing laws.
Addressing journalists after the meeting, Bruno Manano, the Assistant Resident District Commissioner (RDC) of Zombo, gave the lenders two days to comply with the directive.
“We have convened this meeting to ensure that money lenders return confiscated national identity cards to their owners. We are giving them up to Friday to do so. People are failing to access essential services because their identity cards are being held,” Manano stated.
According to The Money Lenders Regulations, Statutory Instrument No.8 of 2018, it is illegal for money lenders to demand or accept national identity cards as collateral for loans.
Zombo has over 20 financial money lending institutions, commonly known as “Now Now”, which provide quick loans with minimal paperwork. However, many of these lenders have been holding clients’ IDs as security, leading to serious challenges when borrowers fail to repay their loans.
Assistant RDC Manano also warned locals against using national identity cards as collateral, stating that it prevents them from accessing key government programs like Parish Development Model (PDM) funds and Emyooga.
A section of leaders in Zombo has called for government intervention to regulate interest rates charged by money lenders, arguing that many lenders both licensed and unlicensed charge exorbitant rates ranging from 10% to 30% per month.
The Minister of Finance, Planning, and Economic Development last year capped maximum interest rates at 2.8% per month (33.6% per annum) under the Tier 4 Microfinance Institutions and Money Lenders Act, Cap. 61. However, many lenders continue to defy these regulations.
Several local leaders and politicians in Zombo District have spoken out against the practice of ID confiscation and high loan interest rates.
Songa Biyika Lawrence, the MP for Ora County, emphasized the importance of locally owned Savings and Credit Cooperative Organizations (SACCOs) as an alternative to high-interest money lenders.
Esther Afoyochan, the Zombo Woman MP, called for President Museveni’s intervention, warning that many people may not be able to vote in the next elections because their national IDs are being held by lenders.
Constantine Omwon, the LCIII Chairperson of Nyapea Sub-county, stated that many people especially women are being forced out of their marital homes due to loan pressure and unregulated money lending practices.
Robert Musinguzi, a representative from Agafi Finance in Paidha Town Council, acknowledged the challenges in the money lending business and called upon clients to collect their identity cards from lenders’ offices.
“Many clients are failing to take back their IDs. However, we are now ready to return them as directed,” Musinguzi stated.
Public Reactions
Jerose Mandhawun, a resident of Zingili Cell, said: “We go to money lenders because they don’t delay giving us money, but our IDs are all with them.”
Comfort Pimer, a vendor from Paidha Main Market, expressed frustration with government loan programs: “I registered for PDM funds two years ago and haven’t received anything. I’d rather go to money lenders who give me money immediately.”
President Yoweri Museveni has previously declared war on money lenders, vowing to shut down predatory loan businesses over their high interest rates and exploitative practices.
Speaker Anita Among last year demanded that the Finance Ministry operationalize the Tier IV Microfinance and Money Lenders Act to curb unregulated lending and high-interest rates.
Under Uganda’s laws, the Minister of Finance, in consultation with the Uganda Microfinance Regulatory Authority (UMRA), has the power to control interest rates and set regulatory guidelines for money lenders.
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