Last month, this publication published a story where a whistle-blower petitioned concerned authorities to look into lending/ business practices at Platinum Credit Uganda Limited which they say warrant an investigation.
One of the issues the whistle-blower raised was contract transparency. It is alleged that loan agreements contain clauses that may not meet full disclosure requirements.
It was further alleged that critical terms regarding property seizure appear to be obscured within complex documentation.
When it comes to Loan Term Enforcement, the whistle-blower report in our possession alleged that properties are being seized before stated loan terms expire.
That borrowers have continued to report inconsistent application of contract terms.
“We please request your investigative team to: Review Platinum’s lending documentation and practices, investigate compliance with mortgage lending regulations, examine property seizure procedures and consider establishing a channel for affected borrowers to report experiences,” the whistle-blower prays.
Platinum Credit Uganda Limited did not respond to our request for a comment.
Following this story, other clients from the same financial institution have come out to express their disappointment with the former.
One of the affected clients, told this publication that Platinum persuaded him to get a loan of sh.4,600,000. They kept deducting from his salary for seven months. But to his dismay, when he decided to clear it at once, they told him to pay sh8,790,000 without considering the earlier months they had deducted.
Another client says you can never clear Platinum’s loan and topping up is used as their trap.
“When I topped-up last year in March to make sh7.9 m and I was already paying installments of sh310,000 for the last 19 months and I then asked to settle the loan, they asked me to pay sh13m. So in total they have collected sh19m from me in less than 2 years. I paid because I was fed up with them,” said another client.
Another customer shared his wife’s experience with Platinum’s Kabale branch.
“Let me take this opportunity to express my wife’ s bad moment with Platinum bank, Kabale branch. She is a primary teacher from Rukiga district. She got a salary loan worth sh3.5m. Then after some time, one of their staff called me to tell my wife to come immediately to the office to lower her interest. Then she was again given a top up loan of sh1.5m to make sh5m in total. This loan was to expire within 5 years. Within one year she had paid sh13m. We requested Centenary bank to buy it off after an interval of one year but she was asked to pay sh7.8m. In total she paid sh20.8m out of just the sh5m loan she got,” he revealed.
The same issues have been reported at Premier Credit Limited but they will be published in our subsequent publication.
President Yoweri Museveni recently urged the judiciary to take action against exploitative money lending practices in Uganda.
He criticized high interest rates charged by money lenders and emphasized the need for new laws to regulate these practices.
Museveni directed the Attorney General to introduce specific laws to criminalize errant money lenders, aiming to protect Ugandans from predatory lending.
He highlighted that current laws are inadequate and noted that exploitative lending poses a threat to Uganda’s economic stability.
Following President Museveni’s concerns, the government has moved to cap money lenders interest rate.
This move comes amid growing public anger and a series of incidents highlighting the unethical behaviour of some moneylenders.
A legal notice issued under the Tier 4 Microfinance Institutions and Money Lenders Act, Cap. 61, has capped the maximum interest rate that money lenders can charge at 33.6% annually.
The notice also dictates that the “maximum interest rate that a money lender shall charge on the principle or the actual sum of the money advanced as a loan to a borrower is 2.8% per month.”
President Museveni is also urging Ugandans to make use of PDM funds instead of running to money lenders.
DEAR READER,
HAVE YOU EVER BEEN TREATED UNFAIRLY BY ANY OF UGANDA’S COMMERCIAL BANKS, MDIs, MONEY LENDERS, SACCOs OR OTHER FINANCIAL INSTITUTIONS (credit unions, insurance companies, and investment companies)? TELL US YOUR STORY! CALL/TEXT/WHATSAPP: 0777959024 OR EMAIL: [email protected] WITH AS MUCH EVIDENCE AS POSSIBLE.
SOURCE PROTECTION/CONFIDENTIALITY IS OUR NO.1 PRIORITY.
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