Members of Parliament have expressed mixed reactions about a new service by MTN to provide loans to its customers while enabling them to make savings using their mobile phones.
The new service launched on August 10, 2016 and dubbed MTN MOkash, will be managed in partnership with the Commercial Bank of Africa (CBA) and is the first of its kind in the Country. Neighboring countries Kenya and Tanzania have been utilizing a similar service.
However, some Members of Parliament have expressed concern saying such as scheme will be vulnerable to fraud and make Ugandans lose money in the process if a proper frame to regulate its operations is not put in place.
Bulamogi Member of Parliament, Kenneth Lubogo.
Kenneth Lubogo, Member of Parliament for Bulamogi County in Kamuli district who raised the matter in Parliament wondered whether MTN had received clearance to offer financial services which is a preserve of financial institutions.
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.
Joseph Ssewungu, Member of Parliament for Kalungu West in Kalungu district, added that there were weaknesses in regulating telecommunication companies leaving them to operate at the expense of the citizens.
Sewungu wondered why MTN gets the audacity to start operating like a financial institution without being questioned.
Onesimus Twinamasiko, Member of Parliament for Bugangaizi East Constituency in Kibaale district said MTN did not seek Parliament’s permission on their new service, adding that the mandate to make money had been misplaced.
He said the Telecommunication companies and financial institutions are making more money than the Bank of Uganda while exploiting citizens.
However, the State Minister for Finance and Planning, Hon. David Bahati said that whereas MTN had no license to offer banking and money lending services, Bank of Uganda had given them authority to operate the platform in partnership with Commercial Bank of Africa.
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.
He clarified that the money being used in the MTN MOkash service 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.