Letshego Uganda Limited has dismissed accusations of cheating teachers and policemen in Loans Scam
On Thursday, May 21, 2020, a local newspaper published a story, quoting police sources that up to 5000 teachers and policemen had been cheated in a loans scam orchestrated by yet to be named Ministry of Public Service officials in collusion with the lender’s staff.
According to the story and police sources, money would be fraudulently credited to accounts of public servants’ accounts, even when they had not applied for loans in the first place. The said erroneous recipients would then be followed up by certain officials in the public service ministry and asked to refund the money. However, following the refund the salaries of the erroneous recipients would continue to be deducted, yet the money had been retrieved.
In a statement last week, Roger Mugisha, the Financial Institution’s Head of Corporate Communications denied any involvement and said that it was instead Letshego who had alerted the police, following customer complaints.
“In 2015, through our branches, we received complaints related to loan disbursements where applicants from districts like Iganga, Jinja and Luwero were raising queries pertaining to deductions being made from their salary and yet they hadn’t applied for the loan (s),” said Mugisha.
“Letshego reported a case at Jinja road police station, vide Police Ref/CRB2979/2015 and GEF 29/2019. Letshego continues to cooperate with the Police to ensure these cases are logically concluded,” he added.
Mugisha said: “We wish to emphasize that Letshego is the victim because it is the institution that lost money and not a beneficiary of the fraud.”
He said that at Letshego, they are bound by Customer Protection guidelines issued by Uganda Microfinance Regulatory Authority (UMRA) which embody transparency and integrity.
“We cannot cheat customers who we open doors every day to serve and the only reason we exist,” Mugisha said.
Letshego Uganda is a member of the Letshego Group- an African multinational financial services provider, headquartered and listed in Botswana. It has presence across 11 Sub-Saharan markets. The Group’s inclusive finance agenda is focused on providing underserved customers with access to simple, competitively priced, appropriate and accessible financial solutions.
CEO East Africa has carried its own preliminary investigations and from what we have gathered, it appears this was a case of abuse of office and identity fraud by a cartel within the Ministry of Public Service and at the respective districts. Identity fraud is the use by one person of another person’s personal information, without authorization, to commit a crime or to deceive or defraud that other person or a third person.
“Ideally Letshego as a financial institution cannot credit an account of someone who has not applied for a loan. From what we have found out, the powerful cartels at the district and public service, because they are the ones who approve these loan applications by civil servants, would find out who has received a loan from Letshego and then demand for a cut of the loan,” said the source.
Uganda’s Corporate Finance and Capital Markets Luminary, Miriam Ekirapa Musaali, Passes OnHowever, when Letshego learnt of this fraudulent practice, the matter to police for handling.
“As far as we know, Letshego is cooperating with investigators,” said our source at Police.
In a recent interview with CEO East Africa Magazine, Mr. Sydney Asubo, the Financial Intelligence Authority (FIA) Executive Director, said that fraud- which among others, includes corruption, theft, and cybercrimes, including identity theft and embezzlement is the most prevalent financial crime in Uganda.
Letshego loan repayment holiday
Early this month, the company announced a Repayment Holiday for its borrowers affected by Covid-19 knock-off effects, extending a 3 months repayment moratorium
“The Repayment Holiday allows you to take some time out from the financial burden of repayments. It is important however, to note that this holiday mainly targets those customers whose businesses have been affected by Government Intervention measures during the current COVID-19 through business lockdown and closure, for example, those in sectors like- Education, Tourism, Transport, Leisure and Hospitality,” Aijukwe Giles, the CEO of Letshego told the media.
“In line with our operational mandate, Letshego practices responsible lending and acts in our customer’s best interests, ensuring affordability, transparency of terms and conditions as well as supporting the borrower if they experience repayment difficulties. This means that by the time they have approved your loan application, they’ve made the effort to determine whether you can repay without substantial hardship,” Aijukwe affirmed.
He said that Letshego had designed a simple application form to be signed by the customer; that will then be scanned and sent to the branch.
Customers are also encouraged to use their digital and online platforms (WhatsApp and web application forms) to apply for these holidays. A list of qualifying customers has been generated across the lender’s 45 branches countrywide and the branch teams were reaching out to them.
“Customers who are not yet contacted are encouraged to contact their respective branch managers and relationship officers to confirm if they qualify for the Repayment Holiday,” said Mr. Aijukwe.
