By Ayub Kirinya
There is looming poverty among the women in Bugisu sub region as many of them continue to choke on small loans given by unlicensed money lenders.
The money lenders whom the women in the region have nicknamed ‘Team no sleep’ have caused havoc in their lives.
The groups which have manifested with different names have pitched camp in the districts of Mbale, Sironko, Bulambuli, Manafwa, Bududa, among others within the region with the aim of offering personal loans and small business loans to unsuspecting borrowers.
Some of the money lenders include one located in Nkoma in Mbale City. This trades under New Hope Financial solutions, the name registered on the trading license issued by Mbale City Council in the names of Frank Lwakazina but on the signpost, the company trades as Upright Financial Services Limited, another is Lendsup Financial Solutions in Namunsi among others.
While many of their unsuspecting customers seek to get money to improve on their livelihood, the loans have instead impoverished them. This is due to the high interest rate and the short period of time given to service the loan. For example, money is given out at 20% interest rate and if one took the money servicing the loan is immediate.
“These groups started in our area during the covid19 period, they target poor people which get money to fend for their families” Jennifer Kakayi, a resident of Namunsi in Mbale City said. She notes that many women play seek and hide games with the money lenders because they have defaulted on their loans.
To qualify for a loan, one must surrender his or her National Identity Card as collateral security, have a guarantor who also has to deposit his national ID with the money lenders.
Hajjati kakaire, the Chairperson of Nakaloke 3 Zone in Northern City Division says “many people have deposited their IDs with the money lenders, out of every 50 women, you will find only 20 in possession of their National IDs.
She says the money lenders whom they have termed “team no sleep” have made it impossible for the local people to develop themselves because of the high interest and the short period of time given to pay back the money.
The residents claim the loans have made many beneficiaries poorer than they were before getting the money which they thought would help to revamp their businesses and lives. This reporter understands that many people among those who have failed to service the loans have instead abandoned their homes for fear of being arrested.
The LCI chairperson of Afia ward in Mbale City’s Northern Division says many of her residents have abandoned their homes and only return in the night.
“if you move around right now you find that many doors are locked, it’s not that the owners have gone to work no, they wake up early in the morning to move out and return late in the evening, this is for fear of being arrested by the money lenders,” she said.
Hadija Nambafu, the female councilor representing Afia ward in Northern City Division says the money lenders have excerbated levels of family neglect as many women abandon their homes and children.
According to her, all over Bugisu sub region in the areas she has moved, the money lenders have established offices in small rentals within trading centers. Adding “as local leaders, they have never been briefed on the operations of the money lenders who operate in their areas who in turn confiscate the residents’ National IDs”.
The money lenders come in an area, rent a double room and the front door is used as their office while the behind room is where they sleep. What is bizarre about them is that all of these people seem to come from one part of the country.
Nambafu wants the government to speed up the process of disbursing the Parish Development Model funds to the local people to save them from the extortionists.
“If people start accessing this Parish Development Model Funds, then the money lenders will have no one to lend to and in the end they will lose business which will force them to quit the areas in which they operate,” she noted.
Malomo Michael, the former Mbale City Principal Commercial Officer who is now the Principal Accountant at the Northern City Division Headquarters says the money lenders renting rooms in trading centers around Mbale town operate illegally as they have never been licensed by the city authorities and that they never pay taxes.
“Regarding the issue of the mushrooming money lenders around town and other parts of the region, we have never as a city authority received any application on their operations, we don’t know them and they have never paid taxes, if any one at the Divisions is taxing them then he or she is doing it illegally.”
He added that the groups are under investigations “in fact what I can tell you is that they are under scrutiny and investigations” and condemned the acts of confiscating a National Identity Card as a collateral security which he termed as illegal.