Members of Parliament have questioned MTN Uganda’s ability to offer savings and loan financial services to through their new platform termed MoKash.
The financial service available for MTN Mobile Money customers provides customers with a platform to save money and to take loans on a short term basis.
Hon. Kenneth Lubogo (Bulamogi) who raised the matter in Parliament wondered whether MTN had received clearance to offer financial services which is a preserve of financial institutions.
“We need to know where MTN got the authority to help people save and give out loans. These loans are at a ridiculous interest rate of nine percent per month,” Lubogo said.
He said this is a serious matter that the government needs to look into the new service as it has been launched to the public.
“Let us be patriots and regulate such this issue. This scheme should be suspended until we are sure that our people are protected,” Lubogo added.
Hon. Joseph Ssewungu (Kalungu West) added that there were weaknesses in regulating telecommunication companies leaving them to operate at the expense of the citizens.
“MTN has got the audacity to start operating like a financial institution without being questioned. Parliament’s permission was not sought on this matter,” Ssewungu said.
Hon. Onesimus Twinamasiko (Bugangaizi East) also said that the mandate to make money had been misplaced.
“Telecommunication companies and financial institutions are making more money than the Bank of Uganda while exploiting citizens,” Twinamasiko said.
The Minister of State for Finance and Planning, Hon. David Bahati (said that MTN had no license to offer banking and money lending services but added that, Bank of Uganda had given them authority to operate the platform in partnership with Commercial Bank of Africa.
“I have noted your concern especially to do with the interest rates and the legal framework under which such a scheme is operating. We will look at the gaps and make sure we progress cautiously so that our citizens are protected,” Bahati said.
He added that the Ministry was in the process of procuring an intelligence machine in the next three months to identify any unknown revenues telecommunication companies were making.
The Minister for ICT, Hon. Frank Tumwebaze pledged to present a comprehensive report on the regulatory framework for the telecommunications companies “The money being used in Mokash is provided for by a bank called Commercial Bank of Africa and MTN avails a mobile mechanism to transact without having to visit the bank,” Tumwebaze added.