SACCOs Deny Mandatory BoU Registration Claims

  Key Information: Leaders of SACCOs call for a unified regulator due to conflicting regulations. Thanks for visiting Nation...

 

Key Information:

• Leaders of SACCOs call for a unified regulator due to conflicting regulations.

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The Uganda Co-operative Savings and Credit Union (UCSCU), which serves as the overarching organization for Savings and Credit Cooperative Societies (SACCOs), has refuted media claims suggesting that SACCOs are required to register with the Bank of Uganda (BoU), calling the statement inaccurate and lacking legal foundation.

During a media event in Kampala on Wednesday, UCSCU Chairperson Col Allan Kitanda Tom stated that the existing regulatory framework is still conflicting, with overlapping laws causing confusion among SACCO participants.

"The confusion stems from discrepancies among the Cooperative Societies Act, the Tier 4 Microfinance Institutions and Money Lenders Act, and the Microfinance Deposit-Taking Institutions (MDI) Act, each of which grants regulatory oversight to different bodies," Col Kitanda stated.

He stated that SACCOs are currently under the oversight of three organizations: the Ministry of Finance, which took over the responsibilities of the now-defunct Uganda Microfinance Regulatory Authority (UMRA); the Bank of Uganda, which aims to regulate larger SACCOs; and the Registrar of Cooperatives, who is responsible for registering and monitoring all SACCOs irrespective of their size.

The count of SACCOs in Uganda has risen to more than 30,000, showing a growth of 26,034 from 2015 up to March 2025, as per official statistics.

On Wednesday, Col Kitanda stated that the 2022 revision of the MDI Act eliminated clauses that would have brought major SACCOs under the oversight of the BoU.

"Parliament changed its previous stance and removed the suggested clauses for major SACCOs from the MDI Amendment Bill 2022. The Act was approved by the President without any provisions related to SACCOs. As a result, the MDI Registered Societies Regulations issued later lack a legal foundation," he stated.

UCSCU has initiated a legal appeal (HCCS No. 0130 of 2024) in the High Court's Civil Division to obtain judicial guidance on the issue, which is still under consideration.

Col Kitanda highlighted that SACCOs do not stand against prudent regulation, but are advocating for a single, cohesive law and regulatory body to uphold cooperative values and secure members' savings.

"We aim to maintain our cooperative identity and guarantee that SACCOs keep expanding within a well-defined, uniform, and equitable legal framework. SACCOs are still officially registered and functioning under the Cooperative Societies Act, and they should not be required to register once more with the Bank of Uganda," he stated.

Resigning UCSCU Chairperson Jalia Bintu Lukumu called on SACCOs and the general public to ignore claims stating that BoU has become the required regulator.

"Until Parliament passes a single, unified law, SACCOs will remain operating under the control of the Registrar of Cooperatives," she stated.

Johnbosco Atwijukire, the General Manager of Kyamuhunga Peoples SACCO, mentioned that conflicting rules have led to confusion regarding SACCO activities, collaborations, and member expansion.

"Based on what we have learned from nearby countries where SACCOs have thrived, such as Kenya, they have independent bodies that oversee and set guidelines for SACCO operations, which is what we are calling for," he added.

The Bank of Uganda could not be reached for a statement after multiple attempts on Wednesday.

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