The Bank of Uganda (BoU) has moved to dispel persistent confusion regarding the oversight of Savings and Credit Co-operative Organisations (SACCOs), firmly stating that it retains full supervisory authority over large SACCOs as mandated by law.
According to Mr. David Kalyango, Executive Director of Supervision at the Bank of Uganda, the message is clear: “The Bank of Uganda retains supervisory authority as per the Act of Parliament.”
The central clarification from the Bank of Uganda is that the Microfinance Deposit-Taking Institutions (MDI) Amendment Act remains fully in force. This legislative framework, according to Mr. Kalyango, grants the BoU comprehensive regulatory authority over SACCOs that meet the size and operational criteria specified within the Act.
He stressed that “This confirmation is crucial for instilling confidence and ensuring stability within the microfinance sector, which serves as a major pillar of financial inclusion in Uganda.”
Focus on Compliance, Not Penalties
While the BoU is clear about its supervisory role and the existence of sanctions for non-compliance, its immediate approach is heavily focused on collaboration and guidance.
“As we roll out the enforcement process, our priority remains sensitisation, collaboration, and sector-wide organisation,” Mr. Kalyango emphasised.
This commitment to a smooth transition, he revealed, is evidenced by the joint effort being undertaken with key government partners that include: the Uganda Microfinance Regulatory Authority (UMRA), the Ministry of Finance, Planning and Economic Development (MoFPED), plus the Ministry of Trade, Industries and Cooperatives (MTIC)
These entities, Mr. Kalyango explained, are actively engaging SACCOs across the country to support them in achieving compliance with the necessary regulations.
“The overarching goal is to prioritise awareness and guidance over punitive measures, ultimately aiming to build a stronger, safer SACCO sector that protects members’ savings,” he stated.
The BoU’s message, which comes amidst uproar from several SACCOs across the country, is a decisive call to action for large SACCOs to embrace compliance and work collaboratively with regulators to strengthen governance and ensure financial stability