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By Aggrey Baba
For years, Uganda’s online loan market has been like a wild jungle, where borrowers walked in looking for quick cash and often walked out with sleepless nights, harassing messages, and invisible chains of debt. But the Financial Technology Service Providers Association of Uganda (FITSPA) has now drawn the first clear lines, introducing a Code of Conduct for Responsible Digital Lending aimed at taming the unruly fintech forest.
This comes after complaints snowballed over aggressive debt recovery, secret fees, and intrusive access to borrowers’ personal data. Last year, a bog government official revealed how a loan app threatened him after listing him as a next-of-kin contact, a scenario that underscored the dangers ordinary people face daily.
Under the new rules, money lenders must be transparent about costs before disbursing any money, and interest, penalties, and hidden charges must appear in simple, easy-to-read statements.
Borrowers now have a cooling-off period, a kind of safety net, allowing them to return loans without extra costs, a lifeline for those who had been drowning in micro-debt.
Data privacy, long the wild card of digital lending, has been addressed with strict limits, where apps can no longer access contacts, photos, or personal files without explicit permission. Blanket permissions, which previously allowed apps to scoop up vast amounts of personal data, are now banned.
Debt collection is also being rewritten, with late-night calls, threats, harassment of friends and relatives, and workplace intimidation officially being outlawed. Lenders must rely on trained staff or reputable collection agents and must issue formal notices before taking legal action.
Accordibg to FITSPA’s Vincent Tumwijukye, the code should act as a compass for the industry, guiding lenders toward responsible practices while protecting borrowers.
Regulators, including the Microfinance Regulation Department and the Bank of Uganda, have pledged oversight, and may eventually legislate the code into law. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
