HOIMA, August 24, 2026 — Savings and Credit Cooperatives [SACCOs] in the Bunyoro region have been urged to always carry out customer due diligence when admitting members to avoid challenges associated with money laundering.
David Muhumuza, the Hoima City Commercial Officer, said data protection and carrying out due diligence, commonly known as Know Your Customer [KYC], is a major obligation of SACCO leaders in safeguarding the institutions against money laundering.
He noted that people with illicit money often target SACCOs because these community-based institutions frequently have weaker Anti-Money Laundering [AML] compliance, less rigid digital tracking systems compared with major commercial banks, and a high volume of cash transactions that can make dirty money easier to integrate and conceal.
Muhumuza said it is important for SACCO leaders to always know the identity of their members, their origins and sources of income before admitting them to the SACCO.
“When you are registering a SACCO, the 30 founder members must have National Identity Cards. If one of these 30 members does not have a National Identity Card, we do not proceed with the registration process. Even along the way, since the SACCO keeps admitting as many members as possible, as we get new members, we ought to know who these members are, where they are from and their sources of income.
“Whereas we need financing in our SACCO, we do not get this financing from just anyone. We need to do due diligence, understand the customer, understand their sources of income and understand the reason they want to join our SACCO,” he said.
Muhumuza made the call during a Bunyoro region media practitioners’ training workshop aimed at creating awareness about money laundering concepts, the legal framework and international compliance requirements.
Muhumuza also called on SACCO leaders to prioritise record-keeping, saying guidelines require the particulars of members to be kept for 10 years. He also emphasised the need for SACCOs to closely monitor transactions on their accounts.
“Record-keeping is important because from these records, you are able to trace the movement of money we get from various people. Monitoring cash transactions on SACCO accounts is also important, and this is why we always insist that as we are electing our board and committees, we need to mix them with members who can read and write and grapple with figures,” he said.
Monic Ndyamuhimbisa, Principal Compliance and Outreach Officer at the Financial Intelligence Authority [FIA], also urged SACCOs to register with the Financial Intelligence Authority and recruit Money Laundering Control Officers.
She noted that these are important requirements for SACCOs to put in place, adding that failure to comply carries heavy penalties.
She underscored the need for different stakeholders, including the media, to take an interest in the fight against money laundering because it affects the economy of the country.
“When huge amounts of illegal cash are injected into the legitimate economy, they distort normal market forces, inflate prices of specific assets such as land and cause unemployment,” she said.
Jossy Muhangi, Principal Communication Officer at the FIA, said Uganda loses Shs1.74 trillion annually to money laundering and that the money is often smuggled out of the country or transferred through illegal financial flows [IFFs] linked to corruption and other financial crimes.
Muhangi added that the authority registers more than 1,000 cases of money laundering from different government entities, of which more than 200 are investigated.
Speaking as the chief guest at the workshop, which took place at HB Hotel in Hoima town on Wednesday, Hoima City Resident Commissioner Baduru Mugabi commended the FIA for training media practitioners on money laundering.
He said the training had come at the right time, when the public is facing increasing cases of digital fraud.
Mugabi expressed optimism that once the media are empowered, they will create awareness and help the public safeguard themselves against increasing digital fraudsters.
He also said money lending is another problem that needs to be tackled by the FIA because it is fleecing people through abnormal interest rates and transactions by money lenders.
Money laundering in cooperatives occurs when illegal funds from crimes like corruption or drug trafficking are passed through cooperatives to make them look clean. Criminals use these groups because smaller financial cooperatives often have weaker compliance checks than major commercial banks.
Reports indicate Uganda loses approximately Shs 1.74 trillion [US$ 500 million] annually to money laundering and related illicit financial flows. While the country achieved a landmark milestone by successfully exiting the Financial Action Task Force [FATF] “grey list”, it faces an ongoing battle to secure its financial systems and prevent regulatory backsliding.
https://thecooperator.news/bunyoro-leaders-furious-over-limited-oil-benefits-for-local-communities/
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