Mobile telecom companies MTN and Airtel have denied requiring customers to provide guarantors when accessing their mobile money lending products.

The clarification follows complaints received by Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) from members of the public who reported that money on their phones had been deducted without their consent. The committee also raised concerns over the operation of allegedly unlicensed digital lending applications.

Appearing before the committee, Airtel Mobile Commerce Uganda Managing Director Japhet Aritho and MTN General Manager for Corporate Services and Company Secretary Dennis Kakonge said their respective lending products are unsecured and do not require customers to provide guarantors.

The two companies also called for centralized regulation of online lending applications, arguing that a coordinated regulatory framework would help protect consumers and safeguard the financial sector.

MTN and Airtel further clarified that they are not licensed to lend money directly to customers. Instead, they provide platforms through which customers access loans offered by licensed lending companies.

The telecom companies have also proposed that the Uganda Communications Commission (UCC) urgently move to block unlicensed online lending applications operating in the country.

The matter comes amid growing concerns over consumer protection, unauthorized deductions and the regulation of digital lending services in Uganda.

By Charles Kabalwa