Uganda
22 Feb 2017 - by A4ID

Securing legal aid for victims of fraud in Uganda

A4ID partners work to support victims of a complex case of large-scale fraud

In Uganda, a series of notorious Ponzi schemes targeted poor consumers, in which the fraudsters pretended to be a microfinance institutions promising high returns on the sale of ‘coupons’. People took out loans in order to ‘invest’ in the scheme, and when it collapsed were unable to repay their debts.

In some cases, the consequences were serious and far-reaching as vulnerable people lost their life savings and their homes. What is more, in Uganda people can be imprisoned for being unable to repay debt, which drove some people to flee the country or to commit suicide.

The Central Bank of Uganda did not shut down the schemes and the Ugandan government did not successfully prosecute the directors involved. One of A4ID’s development partners, The Global Alliance for Legal Aid (GALA) is an association of jurists which supports access to legal aid in developing countries. Through A4ID’s broker service, GALA worked together with the law firm, Simmons & Simmons, to document the history of the fraud and advise which legal actions the victims could take, in Uganda and internationally.

Raising the profile of this type of fraud in the international banking and microfinance communities, and with all stakeholders working to achieve financial inclusion, is a step towards wider awareness of the damage such types of schemes can have on peoples’ lives, and developing improved practices to protect people from the consequences. GALA has also been providing mediation assistance to the victims of the Ponzi scheme, and is now exploring options for how to run and fund litigation to further support the rights of those affected.

Menu Title