Bank of Uganda regulation: Will it foster SACCOS growth or stifle it?

MBARARA CITY, October 27, 2026 — The deliberate effort of Bank of Uganda to regulate large Savings and Credit Cooperative Societies [SACCOS] that have savings of Shs 1.5 billion and above and institutional capital of Shs 500 million is noble, as far as it seeks to fulfil its mandate to ensure financial stability, protect members’ savings and mitigate money laundering. Nevertheless, the overzealous pursuit of this goal at the expense of addressing the various legislative and regulatory frameworks may be a recipe for disruption of a fast growing and thriving financial sector that is locally member-owned and managed.

It is pertinent that the Bank of Uganda takes into account the series of meetings and stakeholder engagements between Uganda Cooperative Savings and Credit Union Limited [UCSCU] leadership and Bank of Uganda, the parliamentary leadership and the President of the Republic of Uganda. Although I am not an economist or a financial guru, my ordinary eye has seen real time social economic development triggered by the creation of a Co-operative and Savings Society under the aegis of Ankole Diocese that has morphed into a billion-shilling financial institution.

SACCOS in Uganda number about 13,000 and are now the most preferred financial destination of the ordinary folk, whether for savings or credit. According to Niwali Consult, in 2025, Millennium SACCO posted total assets of Shs 47.3 billion, savings of Shs 20.7 billion, share capital of Shs 14.1 billion, loans of Shs 39.5 billion and profits of Shs 4.2 billion, the highest for any SACCOS in southwestern Uganda.

 What is the story behind these statistics?

Throughout the seven branches and 13 outreaches of the Millennium SACCO spanning from Mbarara to Ibanda, Kamwenge, Hoima and Kampala, ordinary people have been sensitised to save and buy shares, a practice that is otherwise uncommon among the Ugandan population. Borrowing money at a reasonable interest rate and with an opportunity to easily access credit has enabled other sections of the population to promote coffee growing.

Following research conducted by the Bishop Stuart University [BSU] research team on the Church’s promotion of coffee bean in Uganda through church financial SACCOS, it was reported that there was an established linkage between Ankole Diocese’s active promotion of coffee growing on church land, sourcing of loans through the Church SACCOS and increased coffee production, incomes of the Christians and people of all walks of life and socio-economic welfare.

The roll out of government or institutional programmes without adequate research and stakeholder engagement on the short, medium and long-term impact of such policies on the socio-economic life of the citizens and the economy may have far-reaching implications for social and economic stability.

The economic activities engaged in by members have resulted in increased incomes and this has been further affected by the tax waiver by HE Gen. Yoweri Kaguta Museveni in 2023 on SACCOS’ income for members. These deliberate measures by President Museveni and the Ugandan Government have empowered a big section of Ugandans who were previously not in the banking sector but are now in the non-banking financial sector.

A closer study of our Kenyan neighbours shows that large SACCOS are a dominant player in the financial sector. In fact, Kenya drafted a law to regulate SACCOS, but they are not under the daily supervision and control of the Central Bank of Kenya.

It is not surprising that on Kenyan roads, you see thousands of matatus, buses and lorries that belong to SACCOS. Some of the mega commercial buildings in Kenya belong to SACCOS, thus ensuring that the ordinary Kenyans also enjoy a measure of financial freedom.

My several visits to Addis Ababa in Ethiopia have always endeared me to the founding fathers of the nation since, to date, you would be hard pressed to find a foreign-owned bank there.

The story of the sale of Uganda Commercial Bank [UCB] by the Ugandan government, often told by Prof. Ezra Suruma, brings out one major point of the desire by foreign powers, often using Ugandan technocrats, civil servants and neo-colonial politicians, to cement the ownership of money by foreigners and the entrenchment of poverty among the ordinary folk and subservience of the citizens of countries where these forces operate.

It is my contention that a separate law governing SACCOS, with a regulatory framework that is cognizant of co-operative society principles, be drafted as in the case of the Kenya Co-operative Societies Act, with the key role of Bank of Uganda limited to oversight and drafting laws that safeguard members’ deposits and prevent nefarious activities like money laundering. This might create the only lifeline for ordinary folk to easily save, access credit and also share in the crumbs that fall from the tables of the mega banks in terms of shares or dividends to shareholders.

The writer [see photo] is the Bishop of Ankole Diocese and Dean of Province of Church of Uganda. Founder Patron of Millennium SACCO 2012 Ltd.