Large SACCOs get reprieve as BoU, UCSCU agree to extend compliance deadline

KAMPALA, August 14, 2026 — There is renewed hope for stability in Uganda’s cooperative sector after it came to light that the Bank of Uganda [BoU] and the Uganda Cooperative Savings and Credit Union [UCSCU] had agreed to work together towards resolving the long-running stalemate over the regulation of large Savings and Credit Cooperative Organisations [SACCOs].

Following anxiety among affected SACCOs over the impending compliance deadline, UCSCU Chief Executive Officer Sylvester Ndiroramukama said the union had reached an understanding with BoU to have the September 30, 2026 deadline for eligible large SACCOs to obtain BoU licences lifted.

Large SACCOs in Uganda are defined as those holding voluntary savings exceeding Shs 1.5 billion and institutional capital of more than Shs 500 million.

The two institutions are also expected to sign a memorandum of understanding that will set out a roadmap towards resolving the regulatory issues affecting SACCOs in Uganda.

The development emerged on Thursday following a two-day stakeholder engagement co-organised by the African Confederation of Cooperative Savings and Credit Associations [ACCOSCA], BoU, UCSCU and the Uganda Cooperative Alliance [UCA].

The meeting, attended by SACCO members and leaders, representatives from the Ministry of Trade, Industry and Cooperatives (MTIC), and other sector players such as The Uhuru Institute for Social Development [TUI], was opened by the Minister of State for Cooperatives, Tom Alero Aza.

Minister Alero called for proper laws and effective regulation to strengthen Uganda’s cooperative movement.

Speaking during the meeting organised at Speke Resort Convention Centre Uganda in Munyoro Kampala, Alero said harmonising the legal framework governing SACCOs was critical to ensuring that the sector moved in one direction, operated effectively and achieved sustainable growth.

“The legal framework has to be revised and also regulation has to be enforced because there is need for harmony. Without harmony, we cannot take a step,” Alero said.

In a side interview with theCooperator News, UCSCU Board Vice-Chairman Stephen Bongonzya said the two sides had agreed to collaborate in addressing the regulatory concerns that have divided the sector.

“We have agreed to work together to address the issue of the deadline. We believe that the deadline is going to be lifted to an unidentified period,” Bongonzya said.

The proposed extension would provide relief to SACCOs, which have been under pressure to comply with BoU’s licensing requirements while also confronting overlapping regulatory mandates from different government institutions, including MTIC, the Microfinance Regulatory Department under the Ministry of Finance, Planning and Economic Development [MoFPED], and BoU.

The central bank had initially required commercial banks and other regulated financial service providers to transact only with SACCOs that had obtained the necessary BoU licences. In February 2026, BoU extended the compliance deadline from March 31 to September 30, 2026, citing the need for further stakeholder engagement, sensitisation and public awareness following advocacy efforts by UCSCU.

However, SACCOs had been reluctant to proceed with BoU in the absence of a harmonised regulatory framework, which they argued had not been adequately prioritised.

The latest engagement between BoU and UCSCU marks a significant shift in the relationship between Uganda’s financial regulator and the SACCO movement, with both sides now appearing to favour dialogue and collaboration over confrontation.

The issue has been particularly sensitive because of the size and importance of SACCOs to Uganda’s financial inclusion agenda. Government estimates indicate that over 90 large SACCOs could fall under BoU’s regulatory ambit once the applicable thresholds are applied.

BoU has maintained that stronger supervision of large SACCOs is necessary to protect members’ savings, strengthen governance and promote financial stability. The central bank has also described its approach as developmental, including providing support to SACCOs as they transition into formal supervision.

For the cooperative movement, however, the immediate priority is to ensure that regulation strengthens rather than disrupts SACCO operations and is implemented in cognisance of cooperative principles and values, including voluntary and open membership, democratic member control, member economic participation, autonomy and independence, education, training and information, cooperation among cooperatives, and concern for the community.

On the other hand cooperative values include Self-help, Self -responsibility, Democracy, Equality, and solidarity, which may not be understood by a regulator outside of the cooperative movement.

SACCOs are now looking forward to formal pronouncements from BoU on the new timelines and next steps. In their view, this would give them additional time to develop an amicable regulatory framework acceptable to both SACCOs and the government.

The debate over regulation is not unique to Uganda. Marlene Shiels, Chairperson of the ACCOSCA Committee of Experts, said the rapid growth and sophistication of SACCOs globally demonstrated the importance of effective regulation in supporting financial inclusion.

Speaking during the consultative meeting, Shiels noted that SACCOs across Africa were growing in membership, assets and sophistication, creating a greater need for regulatory frameworks that support rather than constrain their development.

She said ACCOSCA’s regulatory roundtables provide an opportunity for regulators, apex bodies and SACCO leaders to share experiences and explore how regulation can be used to strengthen credit unions across the continent.

“I think it is fair to say regulation is playing a bigger part in that growth,” she said, adding that there was a need for regulation to help build stronger credit unions and SACCOs across the continent.

She added that the consultative approach adopted by stakeholders in Uganda was important because it brought together the regulator, government institutions, apex organisations and SACCO leaders to discuss how the sector could develop within a sound regulatory environment that ensures growth and stability of the SACCOs in the country.

https://thecooperator.news/uca-welcomes-bous-extension-of-licensing-deadline-for-large-saccos/

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