Security Agencies in Uganda have issued a strong warning to money lenders against attaching clients’ National IDs as collateral for loans, a practice that is illegal.
The warning follows concerns by Uganda police and it’s sister agencies over the increased misuse of National IDs as collateral, especially in Buwenge District, Busoga Region, Dokolo and Amolatar district in Lango sub-region, and in the Greater Kampala area.
According to a statement issued by Uganda police, National IDs have no economic or monetary value and are supposed to be used exclusively for identification purposes.
“Therefore, any act of confiscation, removing, taking or handing over a National ID, as collateral is illegal, as it denies the owner, the ability to use their National ID for identification while travelling or when conducting other transactions” police spokesman Fred Enanga noted.
In the statement, Enanga called upon anyone whose National ID was used as collateral or confiscated to report to the nearest police for further assistance.
Under the Registration of Persons Act, Section 77 (b), it is an offence if a person without authority deprives or dispossesses a holder of his or her national identification card or alien’s identification card; under Sec. 77 (e) unlawfully keeps or takes possession of a national identification card or alien’s identification card that belongs to another person; and section 77 (f), is in possession of more than one national identification card or aliens’ identification card that is intended to show the person’s identity, commits an offence and is liable on conviction to a fine not exceeding forty-eight (48) currency points or imprisonment not exceeding three years or both.
Enanga urges all money lenders to converse themselves with regulatory do’s and don’ts by the Uganda Microfinance Regulatory Authority.
In their guidelines, a money lender shall not take a National ID, passport, warrant card, or other documents establishing the identity or nationality of the holder, bank savings, ATM cards and security codes for the ATM cards, as collateral for money borrowed.