NIRA, Police Crackdown on Unlawful Use of National IDs as Loan Collateral

Monday, September 25, 2023

NIRA Spokesperson, Osborn Mushabe, has announced collaborative efforts with the police to combat moneylenders unlawfully retaining National Identity Cards (IDs). This response follows the proliferation of advertisements encouraging individuals to secure loans using their National IDs, despite prior warnings.

Moneylenders, typically offering loans ranging from 50,000 to 500,000 shillings, have been known to demand National IDs as collateral. However, numerous borrowers have reported receiving police notices claiming their National IDs as lost, even though they were used as loan security.

In some cases, borrowers have resorted to obtaining multiple IDs, using the first for loans and falsely reporting it as lost. This deceptive practice is believed to be instigated by moneylenders. NIRA and the police have both pledged to pursue charges against moneylenders employing National IDs as collateral.

Nevertheless, NIRA and the police may encounter resistance from the public, as banks often require substantial collateral even for small loans. Individuals like Cissy Nalukwago, seeking modest loans for purposes like her food stall, have opted to provide their National IDs as security due to the convenience and rapid access to funds.

Nalukwago’s situation resonates with others who plan to continue using their National IDs as collateral. Mushabe stressed that individuals willingly surrendering their National IDs for loans will face prosecution, with efforts made to locate and charge the owners of IDs used as collateral.

Additionally, Mushabe cautioned Ugandans against sharing or possessing someone else’s national document, as this constitutes a criminal offense under section 76 of the NIRA Act. Instances have emerged of suspects arrested for registering SIM cards using others’ National ID details.

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