The National Identification and Registration Authority (NIRA) has prohibited public from the use of National Identification cards as security for loans.
The directive was on Wednesday, September 13, 2023 pronounced by the directorate of Legal affairs – NIRA in a press release.
In the Legal Alert issue No. 01/2023, the authority referred to Section 69 of the registration of persons Act, 2015 which clearly states that an issued National Identification Card remains the property of the Government of Uganda.
It states, “National ID Card holders are thus advised to desist from using National Identification Cards as Security for obtaining loans, the National Identification Cards are vital government issued documents that serve as proof of identity and citizenship”.
NIRA warned the money lenders who have been retaining national Identification cards as security for loans issued out to individuals to stop describing it as illegal practice that violate the rights of the cardholders.
This pronouncement by NIRA has paralyzed the money lending businesses in the urban setting since they have been dependent on the National Identification cards.
Michael Byaruhanga, a money lender in Moruapesur cell, Soroti city East division expresses worries that his business may collapse.
“As a money lender for seven years now, I have been retaining people’s IDs as security, such news by NIRA may now jeopardize my business”, he said with sad face.