Don’t Send on This Number”: Ugandans Bypass Mobile Money to Escape Aggressive Loan Deductions

KAMPALA — A growing number of Ugandans are increasingly finding ways to bypass mobile money loan repayments, highlighting rising tensions between digital lenders and borrowers struggling with daily financial pressures.

Reports indicate that many users are diverting transactions to alternative phone lines or asking senders to withdraw cash on their behalf, in an effort to avoid automatic deductions by telecom companies and online lending platforms.

The trend stems from loan recovery systems that allow lenders to automatically deduct funds from borrowers’ mobile money wallets as soon as money is received, often sweeping entire balances without leaving users with funds for basic needs.

As a result, a common phrase has emerged among users: “Don’t send on this number,” a warning meant to protect incoming funds from instant deductions.

Financial observers say the behavior reflects a deeper structural challenge rather than simple default. Many borrowers initially turn to quick digital loans to address urgent liquidity needs, but rigid repayment systems have made it difficult for them to recover financially.

Critics argue that the current model prioritizes full loan recovery at the expense of borrowers’ survival, particularly for low-income earners who depend on mobile money for day-to-day transactions.

“If deductions were limited to a percentage of incoming funds, such as 10 to 20 percent, borrowers would be less likely to resort to these avoidance tactics,” one observer noted. “Right now, people are simply trying to protect what little they have.”

The situation raises broader policy questions about consumer protection in Uganda’s fast-growing digital lending space. Analysts suggest that introducing caps on automatic deductions could strike a balance between loan recovery and financial sustainability for borrowers.

As mobile money continues to play a central role in Uganda’s economy, the emerging trend signals the need for regulators and service providers to reassess how digital credit systems operate, ensuring they remain both effective and fair in a challenging economic environment.