ARUA CITY, UGANDA — A major financial scandal has erupted in Uganda’s microfinance sector after Hon. Rose Obinga, the Woman Member of Parliament for Terego District, personally stormed the offices of Premier Credit Limited in Arua City. In a viral, high-tension video, the “tough-talking” legislator accused the subsidiary of The Platcorp Group of operating a calculated debt trap that allegedly exploits poor civil servants and constitutes a massive “100% interest scam.”
Hon. Obinga’s dramatic intervention was prompted by constituents losing assets due to the lender’s alleged predatory lending practices. Her primary focus was on the mechanism Premier Credit allegedly uses to maximize illegal profits: the deliberate denial of timely loan quotation statements.
The Anatomy of the Scam
The MP confronted staff, demanding to know why they were refusing a client’s request for a payoff quote. “Somebody wants to pay off your loan. How can you say you’re giving quotation once a month?” she challenged. Hon. Obinga asserted that the lender claims a restrictive policy of only issuing quotes once a month—a practice she stated violates Bank of Uganda policy—as a tactic to force clients to continue accruing interest.
“This boy has been coming and you don’t want to speak to him,” she shouted, explaining that the lender uses this delay to allow interest to grow, thus ensuring that clients who took a small loan end up paying exponentially more. She cited a teacher who borrowed UGX 1 million but was forced to pay back UGX 2 million, describing the operation as a “root for stealing.”
“I will close this place. These are poor people. You bring them here. You start cheating. You are going to leave West Nile, if you think I’m joking,” the MP vowed, promising to engage the Ministry of Finance to have the lender’s license revoked and the company “flushed out” of the region.
@informationispowah Primary School Teacher from Terego District Gets Saved from Money Lender in Arua City After Woman MP Hon Obigah Rose Blasted Them for Tossing the Teacher Over Loan Repayment. Details here. #iip_updates #Information_is_Power #we_inform_the_uninformed
Regulatory and Investor Fallout
The scandal is creating immediate pressure on regulatory bodies and international investors alike.
Premier Credit, a private, credit-only microfinance institution established in 2014, recently secured a $1.5 million investment from Swiss-based impact asset manager, Enabling Qapital. The investment was meant to promote “ethical” financial inclusion, a mission that is now directly contradicted by the MP’s claims of fraud and exploitation. The scandal places the international investor at severe risk of being complicit in a major “impact washing” debacle.
A source reveals that Premier Credit owners attempted to secure political immunity by seeking a meeting with the finance ministry.
The Ministery officials, however, reportedly rebuffed the offer, promising the owners that they “should carry their cross.”
Adding to the regulatory crisis, the Microfinance Regulatory Department (under the Ministry of Finance) reportedly summoned Premier Credit officials over the allegations, but they failed to appear, signaling a troubling disregard for national oversight.
Hon. Obinga has promised to take the case to the highest levels, declaring, “I will reach Minister of Finance right now. I will reach the case now.”
PART 2: Under Investigation
- We are currently investigating the specific lending agreements and interest calculations used by Premier Credit Limited to quantify the alleged 100% scam and identify victims who have lost property.
- We are also seeking an official statement from Enabling Qapital regarding the due diligence conducted on Premier Credit’s lending practices prior to their $1.5 million investment.
