Why SACCOs should invest in research and development in a data-driven business environment
BUSHENYI, August 31, 2026 — Savings and Credit Cooperative Organisations [ SACCOs ] have proved that financial inclusion for all is indeed possible, and the equation of rural economic development cannot be balanced without SACCOs. These member-owned institutions have become the bedrock of local economies, offering quick access to credit, pooling savings, and helping small businesses turn ambition into action. By providing affordable credit, knowledge transfer, and market aggregation, SACCOs have largely contributed to increased access to financial services – a key driver for private sector development and rural community development.
SACCOs contribute to about 16.3 percent of total share capital in Uganda and being a primary source of credit close to 40 percent of the population. It would otherwise be problematic for rural communities, which remain underserved by commercial banks. At least in every town centre or in two sub-counties you will find a SACCO. There are also government-initiated SACCOs such as Emyooga SACCOs and the Parish Development Model SACCOs [PDM SACCOs].
According to the Ministry of Trade, Industry and Cooperatives, the number of registered SACCOs in Uganda surged from 5,798 in 2015 to more than 31,800 by March 2025. Cooperative organisations also report that credit from SACCOs is now the largest source of formal financing available to rural households.
Yet, despite this impressive growth, a pressing challenge remains: the products and services offered by most SACCOs are still similar and traditional. The same products that were offered ten years ago are still on the shelves today, while the needs of the population continue to evolve – especially with changing demographic characteristics. Yes, many SACCOs like Butuuro SACCO, Kyamuhunga Peoples SACCO, Jubilee SACCO, Mushanga SACCO, Rukiga SACCO, Millennium SACCO and others have embraced digital technology and designed tailored products. But we need to work together and become truly research-driven.
Organisations that have succeeded over the years have invested heavily in research and development [R&D]. SACCOs equally need to interest themselves in research for evidence-based planning. Many scholars have researched SACCO operations, governance, performance, and digital adoption – yet the findings are not fully utilised or received in good faith. For example, a 2025 study of 210 Ugandan SACCOs found that digital orientation, digital capability, and digital innovation all have direct positive effects on performance, and that digital innovation significantly mediates the relationship. These are not theoretical results; they are actionable insights that could transform the sector.
SACCOs, especially Ugandan SACCOs, should rethink their product development strategies to better respond to the needs of young people, particularly university graduates who often possess knowledge, skills, and innovative ideas but face significant barriers in accessing start-up capital. Many graduates struggle to establish businesses because conventional financing models, including most SACCO products, require collateral and focus mainly on traditional lending areas such as boda-boda loans, trade loans, and other established enterprises.
A more forward-looking approach would be for SACCOs to deliberately partner with universities and other higher learning institutions to identify, nurture, and finance viable business ideas generated by young graduates. Through such partnerships, SACCOs could develop youth-friendly financial products that consider alternative forms of assessing creditworthiness beyond physical collateral, such as business potential, innovation, mentorship support, and market viability.
A Data-driven future is already taking shape
The shift towards a data-driven environment is already underway in Uganda. In November 2025, the country hosted its first national Credit Data, Referencing & Innovation Symposium, where Bank of Uganda confirmed that regulatory changes now formally include SACCOs in the credit data ecosystem. By September 2025, 31 supervised financial institutions were using credit bureau services through 837 branches, while 40 accredited credit providers – mainly Tier-4 microfinance institutions – had joined the system. This broader participation creates richer borrower profiles, allowing lenders to price risk more accurately and moving the sector towards full-file reporting.
Moreover, the Ministry of Trade, Industry and Cooperatives has signed a Memorandum of Understanding with Innovation Norway that explicitly includes “research and development to digitalise the informal economy” for cooperative societies. This partnership aims to enhance data-driven decision-making, improve efficiency, and boost competitiveness – a clear signal that the government recognises the value of R&D.
There is a need for a deliberate effort to support SACCOs in establishing an R&D policy framework. Cooperation among cooperatives is one of the core principles of the movement, and it should come into play. SACCOs can cluster themselves – by region, by sector, or by size – and conduct joint research, share data, and leverage a common framework. For example, agricultural SACCOs in the coffee-growing belt could pool data on loan repayment patterns, climate risks, and market prices to design dynamic, index-based credit products. Urban-based SACCOs could collaborate on digital lending platforms that use alternative data [mobile payments, savings group records] to close the gender and youth financing gaps.
Evidence from elsewhere in Africa shows what is possible. In Kenya, the Cooperative University and Cornell University are collaborating on a research project that analyses how SACCOs manage capital, risk, and investment to remain sustainable. The research is expected to have a transformative effect on Kenya’s SACCO sector, enabling them to adopt best practices in governance, financial management, and inclusivity. There is no reason why Ugandan SACCOs cannot do the same.
The world is shifting fast. If SACCOs are to remain relevant to the next generation, they must evolve. They must become faster, more efficient, and more inclusive – not by abandoning their community spirit, but by strengthening it with tools that everyone can use. Investing in research and development is not a luxury; it is a necessity for survival. It is time for SACCOs to embrace a data-driven business environment, to use the findings of scholars and practitioners, and to collaborate across the movement for the benefit of all members. Only then will we move beyond the same old products and truly serve the evolving needs of our communities.
The writer is a student of International Trade Policy and Trade Law and a Principal Commercial Officer for Bushenyi-Ishaka Municipal Council.
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