The Bank of Uganda (BoU) has announced a mandatory regulatory and licensing framework for large Savings and Credit Cooperatives (Saccos) across the country.
The framework, introduced under the Microfinance Deposit-Taking Institutions (MDI) Act, Cap. 58, and the MDI (Registered Societies) Regulations, 2023, seeks to enhance financial stability and safeguard member funds.
In a public notice, the central bank clarified that only Saccos holding voluntary savings above Shs1.5 billion and institutional capital exceeding Shs500 million, including retained earnings and reserves, must obtain a BoU licence.
“Operating without a licence is illegal and may lead to legal penalties,” BoU warned, emphasizing that the regulation applies only to large Saccos meeting these thresholds.
Eligible Saccos must first register with the Registrar of Cooperatives under the Ministry of Trade, Industry, and Cooperatives before submitting their licence applications to the central bank.
The central bank is required to make a decision within six months of receiving complete documentation.
Licensed Saccos will benefit from enhanced protection of members’ deposits under the Deposit Protection Fund, access to additional funding from government and external sources, stronger governance and risk management, and inclusion in the Credit Reference Bureau system.
The central bank advised Saccos to maintain proper financial records, train directors and staff in governance and risk management, and uphold ethical lending practices to remain compliant.
Licensing fees include an application processing fee of Shs100,000, a one-time licence fee of Shs500,000, and an annual renewal fee of Shs500,000 due by January 31 each year.
The central bank said it is working with relevant ministries and agencies to provide support to large Saccos, noting that the framework will promote transparency, sustainability, and public confidence in Uganda’s cooperative financial system.
