Digital Lending Guidelines in Uganda

Prohibition on Unilateral Changes

In order to ensure transparency and fairness, digital credit providers must adhere to the following guidelines:

Prior Consent Required: A digital credit provider cannot increase charges or limits without customer consent (Guideline 22(1)).
Interest Rate Approval: A digital credit provider must obtain prior written approval from the Authority before changing its interest rate (Guideline 22(2)).

Anti-Money Laundering and Combating Financing of Terrorism

Digital credit providers have a critical role to play in preventing money laundering and terrorism financing. The following guidelines outline their responsibilities:

Source of Funds: Digital credit providers must provide evidence and sources of funds invested or proposed to be invested in their business (Guideline 23.1).
Customer Identification: They must satisfy themselves as to the identity of customers while performing transactions (Guideline 24.1).
Compliance with Anti-Money Laundering Act: Digital credit providers must comply with the Proceeds of Anti-Money Laundering (Amendment) Act, 2022 (Guideline 25.1).

Reporting Requirements and Oversight

To ensure accountability and transparency, digital credit providers are required to:

Provide Books and Records: Make their books and records available to the Authority for inspection and supervisory purposes.
Regular Monitoring: Be subject to on-site and off-site monitoring by the Authority (Guideline 26.1).
Periodic Reports: Make periodic reports and returns as specified by the Authority.
Information Sharing: The Authority may disclose information received in the performance of its duties to other financial regulatory authorities, fiscal or tax agencies, or fraud investigations agencies within or outside Uganda (Guidelines 27.1 and 27.2).

Powers of the Authority

The Authority has the necessary powers to regulate digital credit providers and ensure compliance with the Act and guidelines:

Advice and Directions: If the Authority has reason to believe that a digital credit provider is conducting business contrary to the Act or guidelines, it may give advice, issue directions, or require the provider to show cause why a direction should not be issued (Guideline 28.1).
General Directions: The Authority may issue general directions for the better carrying out of its functions (Guideline 28.4).