The Resident District Commissioner’s office in Kayunga District has outed a two-week ultimatum to all money lenders and credit institutions in the district that retained National Identity cards and other identification documents as collateral to access loans to return them to their owners before they are arrested and prosecuted.
Mr. Solomon Baleke, the Kayunga deputy Resident Commissioner, narrated that the illegal practice was interfering with the progress of government programs such as the Parish Development Model (PDM), as those without national IDs cannot benefit under the poverty alleviation program.
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“During my recent inspection of government programs, I have received complaints from some people that they had failed to access PDM funds because they don’t have anything to prove that they are Ugandans. I have given two weeks to money lenders to return such documents to their borrowers, and those who fail to comply will be arrested and prosecuted in courts of law,” Mr. Baleke fumed.
The deputy RDC advises lenders to engage in due diligence and not lend to borrowers who have no collateral, explaining that confiscation of personal identification documents hinders individuals from opening bank accounts or verifying their identity.
He added, “Even if the borrowers are giving away their national identification cards through ignorance, this doesn’t stop it from being a crime… National identification cards are property of the government,” he said.
Mr. Baleke thereafter requested all residents whose national IDs had been collateralized to register with the RDCs office so that it is easy to follow up on them.
However, some money lenders in the district countered that “the directive is unfair to us. We are bound to lose a lot of money if we handover the IDs to individuals who got loans from us before they pay us.”
It is known that President Museveni late last year instructed the Attorney General to develop legislation for Parliament to prohibit the use of national identification cards as collateral for loans by credit institutions.
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