Uganda is increasingly becoming a destination not only for tourism but also Fintech businesses as digital lending businesses are springing up and thriving in the East African country of about 47 Million population (over 50% of which have mobile telephone and internet access) as well as other populous African countries like Nigeria, Rwanda, Ghana, Kenya etc.
In Uganda, anyone seeking a money lenders’ licence must be a legal entity with an established office in Uganda. Money Lending business in Uganda is regulated by the ‘Tier 4 Microfinance Institutions and Money Lenders Act 2016 (“MFI/ML Act”). Prior to the enactment of the MFI/ML Act, money lending business in Uganda was regulated by the now repealed Money Lenders Act Cap 273, which required moneylenders to apply for licence from the Chief Magistrate’s court.
The MFI/ML Act created the Uganda Microfinance Regulatory Authority and empowered it (under section 6), amongst others, to regulate, license and supervise all Tier 4 Microfinance Institutions and Money Lenders in Uganda to ensure financial proficiency, sustainability and financial discipline in the industry.
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Is there a special licence for a Money Lender company in Uganda?
Yes. Money lending business is regulated in Uganda. No person shall carry on the business of micro lending or financial business in Uganda unless the Uganda Microfinance Regulatory Authority licenses it to do so.
You can also read about how to set up a money lender company in Nigeria HERE.
What is the share capital requirement for a Money Lander company in Uganda?
The minimum required share capital for a money lender company in Uganda is UGX 50,000,000 (Fifty Million Uganda Shillings).
What are the particulars required to incorporate a Money Lender company in Uganda?
Below are the requirements for incorporating a Money Lender company in Uganda:
(a) Three (3) preferred names for the new company;
(b) The registered address and postal address of the company;
(c) Details of the shareholders, directors, and company secretary, which contain the following:
- Full Names
- Home Address
- Contact Address
- Date of Birth
- Phone Number
- Email Address
- Electronic Signature
- Mean of Identification (preferably International Passport)
- Statement of Nominal Capital (i.e., share capital of the company)
(d) Memorandum and Article of Association.
What is the procedure for obtaining a Money Lender licence in Uganda?
Application for a money lender licence in Uganda shall be made in writing and addressed to the Uganda Microfinance Regulatory Authority, Kampala Uganda. The application should indicate in details the type of licence being applied for as there are other micro finance licences issued by the Authority.
The application shall be accompanied by the following:
(i) Certificate of Incorporation;
(ii) Forms of particulars of directors and secretary;
(iii) Registered address of the company;
(iv) National identity card for director and secretary;
(v) Evidence of payment of application fees (receipt).
What are the regulatory non-permissible activities under the Money Lenders law in Uganda?
The following are the non-permissible activities:
(a) A company shall not operate a money lending business without a licence;
(b) A money lender shall not take National ID, passport, warrant card, or other documents establishing the identity or national of the holder, bank savings, ATM cards and security codes for the ATM cards as collateral for money borrowed;
(c) Charging exorbitant and compound interest rates on loans;
(d) Borrowers should not sign sale’s agreements for accessing credit facilities instead of loans agreements;
(e) Borrowers should not sign transfer documents in favour of the lender as part pf the security for accessing credit;
(f) A money lender is not authorized to carry on business under more than one name;
(g) A money lender shall not take client deposits;
(h) A licence issued is not transferable or assignable.
What are the estimated costs for setting up a Money Lender company in Uganda?
| Particulars | Cost |
| Company Registration | UGX 585,000 |
| Stamp Duty | UGX 250,000 |
| Tax Registration | UGX 240,000 |
| Application Fees | UGX 50,000 |
| Licence Fees | UGX 500,000 |
| Miscellaneous Expenses | Available on request |
| Professional Fee | Available on request |
What is the estimated timeline for processing Money Lender License in Uganda?
The licence can be obtained within a period of three (3) to Six (6) months.
What is the lifespan of a Money Lender Licence in Uganda?
Please kindly note that a licence issued to the moneylender is valid until 31st December every year and renewable annually.
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