Government Moves to Tighten Regulation of Online Lending Apps Amid Consumer Complaints

By The Urban Gazette Business & Technology Desk
Kampala, Uganda

The Ugandan government has announced plans to tighten regulation of digital lending platforms following a surge in public complaints over high interest rates, data misuse, and aggressive debt collection practices by mobile loan apps.

Officials from the Ministry of Finance and the Bank of Uganda confirmed that new guidelines are being drafted to bring all digital lenders under stricter licensing and consumer protection rules. The move follows mounting pressure from lawmakers and civil society groups, who say many borrowers—especially young people and small traders—are trapped in cycles of debt.

Mobile lending has grown rapidly in Uganda over the past five years, driven by smartphone penetration and limited access to formal banking services. However, critics argue that weak oversight has allowed some operators to exploit borrowers through hidden fees and unauthorized access to personal contacts.

Authorities say the new framework will require transparency in interest rates, limits on penalties, and stricter data protection compliance. Unlicensed operators may face suspension or removal from app stores.

Why It Matters

Digital lending has become a financial lifeline for millions of Ugandans, but unchecked practices threaten consumer trust and financial stability. Regulation could protect borrowers while ensuring innovation in the fintech sector continues responsibly.

What to Watch

Timeline for implementation of new regulations

Impact on existing digital lenders

Response from fintech companies and telecom operators