Police on Monday issued a warning to all micro loan lenders against confiscating identification documents such as National IDs and passports as collateral.
The directive follows the increased misuse of National IDs as collateral to acquire loans depriving the users from using IDs for identification.
Police spokesperson, Fred Enanga revealed to the press that they have noted that it has become a habit among money lenders who give out micro loans to confiscate national identification cards from members of the public who don’t have collateral security.
He noted that this has especially been recorded in Buwenge district, Busoga Region, Dokolo and Amolatar district in Lango sub-region, and in the Greater Kampala area.
“National IDs have no economic or monetary value and are supposed to be used exclusively for identification purposes,” Enanga said.
Enanga said that the 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.
He further urged the public whose National ID was used as collateral to report to the 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.
Police said that it will carry out raids on money lenders offices to search for ID cards and those who will be found in possession of them shall be charged to court.
Enanga urged 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,”Enanga concluded
