KAMPALA, November 10, 2025 — The Uganda Cooperative Savings and Credit Union [ UCSCU ] has dismissed reports suggesting that Savings and Credit Cooperative Organisations [SACCOs] have been ordered to register with the Bank of Uganda [BoU], describing the claims as misleading and inaccurate.
In a press release published on Monday, UCSCU said the front-page headline published in of the local dailies on November 4, 2025, titled “SACCOs Ordered to Register with BoU”, had caused unnecessary alarm within the cooperative movement and among the general public.
According to UCSCU, the confusion stems from inconsistencies between the Cooperative Societies Act and the Tier 4 Microfinance and Moneylenders [MDI] Act, which have created overlapping mandates among three different regulatory bodies: the Ministry of Finance, the BoU, and the Registrar of Cooperatives in the Ministry of Trade, Industry and Cooperatives [MTIC].
“The effect is that we currently have three regulators for the SACCO sector,” the Union explained. “This has created uncertainty over which authority has the legal mandate to supervise SACCOs.”
UCSCU, the apex body of all SACCOs in the country, clarified that while the 2016 Tier 4 Act had initially proposed to place large SACCOs under the supervision of the BoU, Parliament later reversed this decision. The Microfinance Deposit-Taking Institutions [Amendment] Act, 2022, which was subsequently assented to by the President, did not include any provisions relating to SACCOs.
“As such, the MDI [Registered Societies] Regulations issued thereafter have no legal basis,” UCSCU stated.
The Union further revealed that it has taken legal action against BoU over the matter under High Court Civil Suit No. 013 of 2024, which is currently pending before the Civil Division of the High Court in Kampala.
Dr. Sylivester Ndiroramukama, the UCSCU Chief Executive Officer, notes that the Attorney General’s office had already advised on the need to harmonise the conflicting laws.
He said the Ministry of Finance was leading this process, although it had been slowed by the government’s ongoing rationalisation exercise, which saw the dissolution of the Uganda Microfinance Regulatory Authority [UMRA], and its roles streamlined into the Finance Ministry.
“Our position remains that SACCOs should have a single law and a single regulator to preserve cooperative principles and protect the achievements made by our members as one family,” Ndiroramukama said.
He reaffirmed that SACCOs continue to operate legally under the Cooperative Societies Act, having been duly registered by the Registrar of Cooperatives, and urged members of the public to disregard reports implying that SACCOs must now register with the Bank of Uganda.
“While we do not oppose prudent regulation and supervision, we demand a streamlined regulatory framework under one competent authority,” he concluded.
According to BoU, large SACCOs are those that have deposits of 1.5 billion, and institutional capital [ retained earnings and reserves above 500 million].
Data from MTIC shows Uganda has 33,000 SACCOs. About 10,594 are under the Parish Development Model [PDM], 6,700 under Emyooga,and 15,706 others registered.
Large SACCOs registered by the BoU
The BoU has so far registered three large SACCOs including Mbarara-based EBO Cooperative Savings and Credit Society Limited under the name EBO Financial Services Ltd., Kyazanga-Kwegata Microfinance Cooeprative Savings and Credit Society Ltd., and MADFA Cooperative Savings and Credit Society Ltd.
Benefits
SACCOs registered by the BoU are covered are covered by the Deposit Protection Fund of Uganda [DPF], which guarantees members’ deposit up to Shs 10 million per saver.
According to the BoU, licensed and regulated SACCOs stand to gain several benefits including; protection of members’ savings through the DPF, better access to both domestic and foreign capital/funds strong governance and risk management systems to check mismanagement and fraud.
The BoU-Licensed SACCOs will also be able to use credit reference bureau services to assess borrowers and improve improve their overall financial discipline and regulatory compliance.
Penalties
Under the Microfinance Deposit-Taking Institutions [Registered Societies] Regulations, 2023, registered societies stand to be punished if they fail to comply with set requirements.
A society that does not meet the minimum liquid asset requirement can be fined up to Shs 400,000 and an additional Shs 40,000 for each day the violation continues. Failure to keep and maintain proper records attracts a penalty of Shs 1 million.
If a society delays or fails to submit audited annual statements and management letters to BoU, it risks a fine of up to Shs 400,000.
Submitting monthly returns late or providing false or misleading returns carries a fine of up to Shs 200,000 for each day of default.
The BoU may also revoke a licence if a registered society persistently contravenes the regulations, conducts business in a way that endangers members’ savings, or provides false information. Once the licence is revoked, the society must stop offering financial services except where the BoU allows limited operations for winding up.
https://thecooperator.news/regulating-large-saccos-ucscu-drags-bou-to-court/
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