Online loans

Privacy compromised as Ugandans rush for instant online loans

Kampala, Uganda | UR | A portion of Ugandans have fallen victim to online loan applications offering cheap and instant loans. Loans are always available as long as one has access to a smartphone and the internet.

Unlike banks and other financial institutions that require collateral to acquire a loan, the instant loan app requires the applicant to have a national ID card and two guarantors.

However, while applying for instant online loans, the applicant does not know that his privacy has been compromised.

When applying for the loan online, there is an option that requires applicants to allow access to their phone contacts, call logs, photos, and text messages, among others.

Geoffrey Lwabuga Muwulya, a businessman from Bweyogerere who sells clothes, says he downloaded the “Mangucash” app because he desperately needed the money.

Lwabuga says that to complete registration, he had to give consent to lenders to access his phone contacts and location.

After completing the registration process which took four minutes, he received 45,000 shillings and had to return 60,000 shillings in seven days.

Lwabuga, however, says he was surprised when creditors started calling people in his phone book asking them to pay on his behalf. “They called and threatened my mother and my siblings to make me repay the loan,” says Lwabuga.

Another victim who preferred to remain anonymous said he received a phone call asking him to pay a loan debt for his cousin.

“I received a call from an unidentified person asking me to pay a debt for my cousin because he had registered me as a guarantor when borrowing money. I was surprised where they got my contact from, but the person never gave it to them,” he says.

Paul Ssenoga, a private computer expert, explained that whenever someone else accesses your call log, it exposes the person’s privacy. He adds that creditors will be able to monitor received, missed, dialed and blocked numbers.

A former employee of one of the money-lending companies who preferred anonymity said the company would hire agents whose role was to continue monitoring and calling people in debt to the company.

Read also : Why commercial banks in Uganda are embracing online lending

Ssenoga advises people not to download any app if it is not important. He finds it unusual that an app operator needs to access your messages to give you a loan.

According to the Data Protection and Privacy Act 2019, Section 10 states that a data collector, data processor or data controller shall not collect, process or store personal data in any way that violates the privacy of a data subject.

Article 13 (1) of the same law also states that any person collecting data must inform the person concerned of the nature and category of the data collected, the name and address of the data collector, and the purpose for which the data is necessary and whether the provision of data by the data subject is optional or mandatory.