MTN and Airtel are accused of exorbitant charges on mobile money loans and fraudulent deductionsBy Prisca WanyenyaTelecom operators MTN and Airtel Uganda have come under fire in Parliament over exorbitant charges on mobile money loans and fraudulent deductions targeting unsuspecting guarantors by online lending apps.The MPs expressed displeasure during a meeting between the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) and the Payment Systems Service Providers Association on September 16, 2026.Leading the criticism was Martin Muzaale (Buzaaya County), who tasked the telecoms to explain the rationale behind lending at 2% interest per day, which translates to 720% annually, yet most borrowers are not informed of the rates.“I want to tell you that these short-lived loans are very expensive. Once you pick a loan from Airtel or MTN, they charge you 2%. Multiply it by 30 or 31 days, that is 60% per month, multiply by 12 months you get 720% per year which is very exorbitant. We need to pick this from the regulator as to whether he has any controls,” Muzaale said.Muzaale said he was himself a victim, especially on Airtel, noting that even when he hadn’t borrowed, the telecom deducted money from his mobile money wallet claiming he had cleared a loan he never requested.Joseph Mugenyi (Buhweju County) wondered why telecom operators should not be classified as loan sharks like money lenders. He testified that he recently took a Shs480,000 loan through MTN’s Extra Cash payable in 28 days, with total repayment of Shs528,000.“There is a difference of about Shs53,750, and if you put it into percentage, it is about 11.19% per 28 days. That means in one year it is 134.28%,” Mugenyi said.The telecom operators decried challenges including high Non-Performing Loans, where borrowers discard SIM cards and acquire new lines after defaulting. They said this vice drives high interest rates to enable banks offering capital to cover bad loans.But Moroto Woman MP Stella Atyang dismissed the argument, questioning why telecoms don’t track defaulters instead of burdening compliant borrowers.“But we have left them go just like that and then ended up transferring burdens from one person to the other in terms of hiking the interest. There is reluctance in terms of tracking. What is making it difficult to track this defaulter and yet you have all that information? You end up giving new numbers to these defaulters. Why have you failed to track them other than shifting the burdens?” Atyang asked.Atyang also complained about high agent banking charges, including a flat rate of Shs3,000 on school fees payments and Shs2,000 charged by Centenary Bank per mobile banking transaction.“There are also exploitation charges on transactions. For example, school payment is Shs3,000. If you are using Cente Mobile, per transaction is Shs2,000. I am just wondering what this charge is composed of. Is it only going to you, the middleman, or is it shared? Does it include taxes? Even if that is the case, it is still too high,” she said.Ndorwa West MP Eliab Naturinda blamed telecom companies for not disclosing charges before loan approval, noting that during such transactions, only PINs are required.“I want to point out specifically to MTN that the overdraft fee is 2.75%, daily you charge 0.95%. There is also another challenge, while taking a loan from MTN, they don’t indicate the duration, they simply request you to confirm yes and your PIN. There is nowhere you can go to take a loan and they don’t highlight the duration,” Naturinda said.Naturinda also faulted Bank of Uganda, which regulates mobile money, arguing it approves tripartite agreements between telecoms and commercial banks without oversight from the Solicitor General.“If you are going to charge interest on behalf of Ugandans, the Minister of Finance is not aware, but you just go to Bank of Uganda directly and BoU gives you clearance. That means there is also failure on Bank of Uganda to supervise,” he argued.In response, Denis Kakonge, General Manager Corporate Services and Company Secretary at MoMo from MTN Uganda, said borrowing terms are shared with customers.“The terms are clear to the customer, when they are borrowing, it is clear how much is going to be charged. We continually review our charges. For example, we have not had an increase in tariffs in a very long time, in spite of increase in cost of doing business,” Kakonge said.On complaints of unsuspecting guarantors being locked out of their mobile money platforms by online lending apps, Japhet Aritho, Managing Director of Airtel Money, said leading telecom operators only provide a platform for other service providers.“We are not licensed to offer loans as Airtel Money. That loan product does not require a guarantor. Today, it is very easy to develop an app and upload it on Google Play or Apple Store. Those applications are sometimes used by customers. They download the app and get a prompt that you qualify for a loan,” Aritho said.“Unfortunately, there is no visibility to us when customers download those apps. That next of kin is what they are calling a guarantor. When this information comes to us, we take action and we block the customer they are calling. But we do not have a lot of control on those apps in the ecosystem because it is not something we have visibility on,” he added.Kakonge clarified that all loans offered through MTN Mobile Money are unsecured, requiring no paperwork, guarantees or physical security.“The role that we play, we provide the platform, we work with licensed financial institutions. The lending is carried out by those parties, including customer eligibility, there is credit scoring that is checked,” Kakonge said.He added that MTN has embarked on a responsible borrowing sensitization drive to encourage customers to borrow only what they can repay and to increase reliance on data from Credit Reference Bureaus.“We have observed people borrow and they don’t pay back, they keep on borrowing and changing numbers. We have launched a campaign on responsible borrowing. There should be centralized regulation of all those online apps. We also recommend that the guarantor should provide express consent. UCC can direct telephone operators to block some of these links. It has been done in the past so that we protect the people we represent,” Kakonge said.The post MTN, Airtel Under Fire Over 720% Mobile Loans and Fraudulent Deductions appeared first on Business Focus.