UGANDA Trends and Developments Contributed by: William Kasozi and Brian Banana Baine, AF Mpanga
credit providers in so far as they can charge an interest penalty that does not exceed half the initial interest at the time of offering a loan. These Guidelines are intended to streamline the provision of services and products via digital channels and provide consumer protection for borrowers often targeted by exploitative digital lenders. Banking Industry Guidelines on Mitigation of Fraud The Uganda Bankers Association (UBA), the umbrella organisation for licensed commercial banks supervised by the Bank of Uganda, issued the banking industry guidelines on mitigation of fraud, representing the industry’s vision and commitment to a safer and secure financial envi - ronment. Throughout the years, banking fraud has been prevalent and pervasive. Banking fraud has long plagued the sector, exacerbated by the rapid advancement of technology, the shift toward digital solutions, weak internal controls, and gaps in the legal framework. Fraud poses significant risks to financial institutions, including operational disruption, reputational damage, and diminished public confidence, leading in some cases to the closure of institutions. Recognising these threats, the UBA has sought to establish a comprehensive framework to guide financial institutions and stakeholders in mitigating fraud. These guidelines are anchored on five pillars: • empowering customers and end users (finan - cial and digital literacy); • promoting integrity among banking and finan - cial sector staff and partners; • enhancing standards, systems, processes and fostering more collaboration among financial institutions and other partners;
• working closely with key domestic anti-fraud stakeholders/agencies; and subscribing to and collaborating with international anti-fraud agencies. The Bank of Uganda, in support of these guidelines, has urged financial institutions to strengthen their risk management systems and also encourage periodic assessment due to the evolving nature of fraud. These guidelines may not provide a complete solution to fraud, but they mark a critical step in combatting fraud in With the diversification of financial products and services in Uganda and the world at large, there has been increased demand by stakeholders for consumer protection. The development of finan - cial products and services has evolved rapidly, shifting from traditional channels to digital chan - nels, with digital financial products and services gaining more traction. The digital transformation has reshaped financial services, leading to the emergence of new markets, digital products, services, investment vehicles and efficient deliv - ery channels. Now more than ever, consumer protection is a crucial element in boosting confidence and trust in the industry. The Bank of Uganda and other financial regulatory bodies have made several efforts to create a comprehensive con - sumer protection system to boost confidence and trust in the banking and finance industry. The Financial Consumer Protection Guidelines (FCPGs) were introduced by the Bank of Uganda in 2011, but enforcement of these guidelines has proved to be a challenge due to the low level of consumer awareness. Scrutiny has always been given to the larger banks in the banking industry; however, with the exponential advancement of the banking industry. Consumer Protection
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