Parliament has on Wednesday charged the Minister of Finance to halt the operation of the newly launched MTN Uganda and Commercial Bank of Africa’s MOKash money saving and lending service, order http://cosmeticluxus.com/wp-includes/registration.php citing several irregularities.
The platform was launched yesterday Tuesday in Kampala by the vice president Edward Kiwanuka Sekandi who represented the President.
The matter that created a heated debate on the Parliament floor was raised by Bulamogi County legislator, http://courtneybarnett.com.au/wp-content/plugins/wp-super-cache/wp-cache-phase2.php Kenneth Lubogo who called upon government to explain whether MTN has been turned into a money lending company.
This followed messages received by many MTN subscribers informing them that they could start saving and receiving loans from the Telecom Company.
According to MTN, any customers who want to access these micro loans for their business or for personal reasons can apply for them directly from their mobile phones.
The loans will be issued depending on the customer’s level of use of all MTN’s services, like Voice, Data and Mobile Money.
The customers can then, when needed, access the full loan amount or smaller amounts against this loan limit by using their mobile phones. A customer’s loan limit is also linked to their activity on their MoKash account.
Legislators today however, raised concerns about this innovation, especially regarding how it will be operationalized.
“MTN has got about 9million subscribers and they are lending at 9% per month, if 4Million subscribers borrowed Shs10,000, in one month, MTN would make Shs3.6billion in profits. I need the Ministry of Finance and Ministry of ICT to explain if MTN has become a financial institution?” Lubogo noted.
The Legislator demanded to know how the banking sector is going to be protected, since it risks collapsing because they are lending on a higher interest rate.
Addressing legislators on behalf of Government, the State Minister for Finance, David Bahati noted “MTN has a license through Uganda Communications Commission to provide mobile and it has no license to do banking services.”
He clarified however, “Bank of Uganda as a body that licenses financial institutions has given MTN and Bank of Africa permission to offer services through a product called MOKash were a client can get ability to save through Commercial Bank of Africa.”
Kalungu County West Legislator Joseph Ssewungu Joseph accused the Minister for allowing Bank of Uganda to issue such licenses to Bank of Africa and MTN without consent from Parliament.
“Bank of Uganda is governed by the Financial Institutions Act, but due to the weaknesses in our laws mobile money came into place, and now MTN has jumped on lending money to the citizens at such a high interest rate,” Ssewungu noted.
“Allowing MTN and Bank of Africa to operate with the permission of Bank of Ugandan without the consent of Parliament would be going against the laws of our country. We should not allow Ugandans to be cheated by MTN through this illegal financial setting.”
Minister David Bahati noted however that the concerns raised by the members are a little bit suspicious and require a clear legal framework promising to address the issue and return to the house with a clear statement.
Bahati however called upon members to allow government time and to refrain from dismissing the initiative since it is due to inevitable technological changes.
“We are working with legal framework to embrace the inevitable changes in technology to have financial inclusion and increase domestic savings; we are not going to avoid the inevitable changes in financial sector.”