One of the pillars of the National Financial Inclusion Strategy (NFI)2017-2022 was to build credit infrastructure and also build digital infrastructure among others.
I was embarrassed recently when a section of Ugandans took to social media to demonize the role of online lenders accusing them of being aggressive in a bid to make recoveries.Much as the online lenders might have loopholes in their strategyin a bid to improve financial inclusion, we should instead give them time to improve on their services than being harsh!!
Financial Inclusion is the process to access timely and affordable broad range of financial services which help to ensure a person’s financial security while credit infrastructure is a set of laws or institutions that enables efficient and effective access to financial stability and responsible economic growth.
Therefore the coming of online lenders giving unsecured loans shouldn’t be abused but instead embraced because they are timely,sometimes affordable and broad range compared to traditional lenders like banks hence giving Ugandans a broad range of options to increase financial inclusion.
For starters,20 years back, banks were the only source of credit with a limited number of money lenders. But as we speak now, due to liberalized structure of our economy, there is an influx of money lenders and online lenders who have filled the vacuum, of which we need to embrace as partners in the financial eco-system. Ugandans should not see them as an avenue to seek their services and then cheat them.
As a researcher, I have learnt that some Bazzukulu request loans from online lenders with intention of not paying back. This is very bad and dangerous to the reputation of our country in terms of making Uganda an investment destination for attracting FDI. This is because some of the investors in online lenders many of them are foreigners who believe in our good investment climate.
Salutations to government of Uganda for intentionally developing our digital infrastructure which supports digital lending.Further more Public officers should not be seen in public ridiculously insulting online lenders and money lenders but instead make good policies and laws favourable for the growth of the financial services of Uganda. As for borrowers, we should not be seen to exploit the gaps to refuse to pay. Some reach to the extent of destroying their simcards, this is a bad and suffocates the prospect of our great nation.It also dents your credit history hence more poverty. How do you buy a phone on hire purchase and then wash down the tracker to avoid your obligations. To me this is another form of corruption which our leaders should rebuke in broad day if we are to build a resilient economy. Police should be always available to arrest these criminals who dent our reputation as a country.
In summary, online lenders are private sector lenders who substantiate government poverty alleviation programs like ParishDevelopment Model which might not accessible to everyone. We should not abuse borrowing but instead borrow to invest in order to create multiplier effect and create jobs. You can borrow to buy seedlings to plant but not borrow to go to the beach because it might become hard to pay. That said, many people who are legit have testimonies of how they were helped by online lenders or money lenders to meet their financial challenges.
According to NFIS plan seeks to strengthen the country’s competitiveness for sustainable wealth creation, employment and inclusive growth.
LONG live General Yoweri Kaguta Museveni,Long live Hajjat Uzeiye Namyalo SPA andmanager ONC
Ben Ssebuguzi
ONC economist and Head of Research.
ssebuguziben09@gmail.com
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