The Bank of Uganda (BoU) has announced it will begin licensing large Savings and Credit Cooperative Organizations (SACCOs) under a new regulatory framework designed to protect members’ savings and strengthen oversight of the fast-growing sector.
Under the Microfinance Deposit-Taking Institutions (Registered Societies) Regulations 2023, a SACCO will be classified as “large” if it holds voluntary savings exceeding UGX 1.5 billion and has institutional capital of at least UGX 500 million, including retained earnings and reserves.
In a public statement, Bank of Uganda said the new rules are aimed at enhancing financial stability, promoting transparency, and ensuring that members’ funds are better protected as SACCOs continue to expand their financial reach.
“We are therefore ready to commence the regulation and supervision of large SACCOs,” BoU stated on X.
According to BoU, SACCOs that meet the criteria must first register with the Registrar of Cooperatives under the Ministry of Trade, Industry, and Cooperatives, before submitting a licensing application to BoU. All required documentation is available on the central bank’s website.
The decision has been welcomed by many in the financial sector who believe the move will help safeguard depositors, enhance compliance, and bring about greater accountability within SACCO operations.
However, in 2023 the Uganda Cooperative Savings and Credit Union (UCSCU) filed a lawsuit against the BoU and the Attorney General, challenging the central bank’s legal mandate to oversee SACCOs.
UCSCU argued that SACCOs fall under the jurisdiction of the Ministry of Trade, Industry, and Cooperatives.
BoU has since clarified that it was acting on policy guidance from the Ministry of Finance, Planning, and Economic Development, which approved the new regulatory framework. The regulations were formally published in the Uganda Gazette on June 2, 2023.
With the new regulations now in effect, large SACCOs will be subject to direct supervision by BoU, marking a significant shift in how cooperative financial institutions are governed in Uganda.
