MPs Table Bill to Allow MDIs Offer Islamic Banking and Agent Banking Services

The Minister of State for Finance, Planning and Economic Development (Microfinance), Hon. Haruna Kasolo Kyeyune, has presented to Parliament the Microfinance Deposit-Taking Institutions (Amendment) Bill, 2022 for First Reading.

This was during the plenary sitting of Tuesday, 22 November 2022 chaired by Speaker Anita Among.

According to the bill, the Microfinance Deposit-Taking Institutions (MDIs) referred to as microfinance banks will be allowed to offer among others, Islamic banking, agent banking as well as bank assurance services.

Currently, the existing MDIs have been offering limited services compared to commercial banks like underwriting and placement of securities, offering cheques, dealing in foreign currency, and transacting in computer networks or electronic commerce.

The bill presents another amendment which will allow MDI’s access to the Credit Reference Bureau, which has been restricted by law.

According to the bill, credit reference bureaus facilitate credit information sharing among financial institutions. In this process, lenders and other credit providers submit and share information about borrowers, and repayment habits.

The reports from this bureau help guide lenders to make informed lending decisions.

With these amendments, MDIs will also get access to this information for smooth and improved operations. They will also allow for new developments in the microfinance industry, as well as integrate it with other financial laws.