The Uganda Co-operative Savings and Credit Union (UCSCU), the umbrella body for Savings and Credit Cooperative Societies (SACCOs), has dismissed recent media reports claiming that SACCOs must register with the Bank of Uganda (BoU), describing such assertions as misleading and legally unfounded.
Speaking during a media engagement in Kampala on Wednesday, UCSCU Chairperson Colonel Allan Kitanda Tom highlighted confusion arising from overlapping regulatory frameworks governing SACCO operations.
“The current regulatory environment remains conflicted, with inconsistencies between the Cooperative Societies Act, the Tier 4 Microfinance Institutions and Money Lenders Act, and the Microfinance Deposit-Taking Institutions (MDI) Act, all of which assign regulatory authority to different entities,” Kitanda said.
He clarified that SACCOs currently operate under three supervisory bodies: the Ministry of Finance, which assumed regulatory functions of the dissolved Uganda Microfinance Regulatory Authority (UMRA); the Bank of Uganda, which has expressed interest in overseeing larger SACCOs; and the Registrar of Cooperatives, responsible for registering and supervising all SACCOs regardless of size.
Government data shows that the number of SACCOs in Uganda has grown to over 30,000, reflecting an increase of 26,034 between 2015 and March 2025.
Kitanda noted that amendments to the MDI Act in 2022 removed provisions that would have placed large SACCOs under BoU supervision. “Parliament reversed its earlier position and deleted the proposed provisions for large SACCOs from the MDI Amendment Bill 2022. The Act was assented to by the President without any provisions for SACCOs. Therefore, the MDI Registered Societies Regulations issued afterward have no legal basis,” he explained.
In pursuit of legal clarity, UCSCU has filed a challenge (HCCS No. 0130 of 2024) at the High Court’s Civil Division, which is currently pending.
Kitanda emphasized that SACCOs are not opposed to prudential regulation but advocate for a single, unified law and regulator to protect cooperative principles and members’ savings. “We want to maintain our cooperative identity and ensure SACCOs grow under a clear, consistent, and fair legal environment. SACCOs remain legally registered and operational under the Cooperative Societies Act, and they should not be forced to register again with the Bank of Uganda,” he said.
Outgoing UCSCU Chairperson Jalia Bintu Lukumu reinforced the message, urging SACCOs and the public to disregard claims suggesting BoU is now the mandatory regulator. “Until Parliament enacts a single, harmonized law, SACCOs will continue functioning under the authority of the Registrar of Cooperatives,” she said.
SACCO leaders argue that conflicting regulations have created operational uncertainty. Johnbosco Atwijukire, General Manager of Kyamuhunga Peoples SACCO, cited lessons from neighboring countries like Kenya, where SACCOs thrive under independent regulatory authorities.
“From what we have learnt from neighboring countries where SACCOs are successful, they have independent authorities that regulate, supervise, and mandate the activities of SACCOs, and that is what we are requesting,” he said.
By press time, the Bank of Uganda had not issued any comment on the matter.
