Gov’t moves to tighten regulation of digital lenders as financial inclusion rises
The Ugandan government is planning to tighten regulations on digital lending platforms to protect consumers from exploitative practices. This move follows a significant rise in financial inclusion and the increased use of mobile money for credit.
Why it matters
As digital finance expands in developing economies, balancing innovation with consumer protection is vital to prevent predatory lending and financial instability.
Government is considering strengthening regulation of digital lending platforms as increased access to financial services exposes borrowers to risks of exploitative lending practices.
Ms Shartsi Kutesa Musherure, the State Minister for Finance, Planning and Economic Development (Microfinance), said the growth of financial inclusion must be accompanied by stronger consumer protection measures.
Speaking on the Microfinance docket, Ms Musherure said financial inclusion in Uganda had increased from 70 percent in 2009 to 81 percent in 2023, with the government targeting 85 percent by 2028 under the Second National Financial Inclusion Strategy.
She attributed the progress largely to the expansion of mobile money, Savings and Credit Cooperative Organisations (SACCOs) and Village Savings and Loan Associations (VSLAs).
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