Predatory Lending Apps and the Failure of Regulatory Oversight: A Case Study of Uganda

This research paper, Predatory Lending Apps and the Failure of Regulatory Oversight: A Case Study of Uganda, provides a comprehensive academic analysis of the growth of digital credit, the emergence of predatory lending practices, and the weaknesses in Uganda’s regulatory oversight. Authored by Egesa Ronald Leonard of StratEdge Consulting Group East Africa, the study integrates statutory analysis, stakeholder engagement findings, and comparative evidence from Kenya, Nigeria, and Tanzania. The paper originates from the author’s extensive advocacy work engaging regulators, policymakers, and affected borrowers, culminating in a 2024 Parliamentary Memorandum on illegal loan applications. It critically examines Uganda’s institutional and legal framework - spanning the Tier 4 Microfinance Institutions and Money Lenders Act (2016), National Payment Systems Act (2020), and Data Protection and Privacy Act (2019) and assesses enforcement responses by the Bank of Uganda, Personal Data Protection Office, and the former Uganda Microfinance Regulatory Authority (UMRA) (now the Microfinance Regulation Department, Ministry of Finance, Planning and Economic Development under the 2025 RAPEX reforms). The study identifies systemic regulatory failures arising from fragmented mandates, weak inter-agency coordination, and inadequate market-conduct supervision. It proposes a unified licensing regime for digital credit providers, platform-level accountability mechanisms, and harmonized data-protection and consumer-protection frameworks aligned with G20/OECD and AFI standards.