Overview:
In June last year, Bank of Uganda issued a notice targeting Savings and Credit Cooperative Societies (SACCOs), indicating that it was commencing the licensing of those with voluntary savings exceeding UGX 1.5 billion or institutional capital of not less than UGX 500,000,000, referred to as Large SACCOs.
Bank of Uganda has extended the deadline for the registration of SACCOs by six months, amidst opposition from the leadership of the cooperative movement over the planned regulatory takeover. This extension, which follows various meetings between the leaders of the cooperatives and various government agencies, is aimed at giving time to the different players to harmonise positions.
In June last year, Bank of Uganda issued a notice targeting Savings and Credit Cooperative Societies (SACCOs), indicating that it was commencing the licensing of those with voluntary savings exceeding UGX 1.5 billion or institutional capital of not less than UGX 500,000,000, referred to as Large SACCOs.
BoU said that this was being implemented under the Microfinance Deposit-Taking Institutions Act Cap.58, and MDI (Registered Societies) Regulations 2023. Its records show that by the end of June 2023, at least 99 SACCOs were eligible for this license, but by the end of last year, only three had complied.
It said that this was aimed to safeguard savers through better oversight, promote transparency and sustainable growth of Large SACCOs, and enhance financial stability in Uganda’s SACCO sector, but this faced a backlash with critics questioning its legality without a parliamentary process.
The Ministry of Trade, Industry and Cooperatives, which is in charge of oversight over and promotion of SACCOs, was asked to compel the affected SACCOs to comply with the licensing regime or risk de-registration, according to a December 19th, 2025, letter. The ministry declined to take action, saying that more time was needed to find a way of dealing with the complex regulatory framework for the young industry to prevent declines and shutdowns.
“This multiplicity of laws and overlapping jurisdictions has created significant confusion within the sector. While the Bank of Uganda’s position on enforcement of the law is legally sound, MTIC is of the considered view that the SACCO sector is nascent,” said Lynette Bagonza, the permanent secretary, in a response letter.
“From the regulatory perspective, the sector needs to be approached and managed with a nuanced appreciation of its unique character.”
She also argued that it was prudent to 0await a ruling in Civil Case No. 0130 of 2024, filed by the Uganda Cooperative Savings and Credit Union Ltd [UCSCU], challenging BoU’s regulatory authority. In its latest public circular, the Bank of Uganda now says that the deadline issued to Regulated Financial Service Providers (RFSPs) to update their Know Your Customer (KYC) practices and transact only with licensed Registered Societies/SACCOs has been extended from 31 March 2026 to 30 September 2026.
This extension, it says, is intended to enable BoU to undertake stakeholder engagements, sensitization, and public awareness on its role in licensing and regulatory oversight of the eligible SACCOs. It is also aimed at allowing the eligible SACCOs (those with voluntary savings exceeding UGX 1,500,000,000 and institutional capital exceeding UGX 500,000,000) more time to prepare and submit required licensing documentation.
”During this period, all RFSPs are encouraged to continue supporting registered societies or SACCOs in obtaining the requisite licenses. The Bank of Uganda does not expect any RFSP to deny financial services to eligible SACCOs until the expiry of this period,” it says.
UCSCU, the apex body for SACCOs, has been opposed to some parts of the proposed regulatory requirements as baseless and conflicting. They cite the Cooperative Societies Act and the Microfinance Deposit-Taking Institutions Act, which they say should be first harmonised with the BoU regulations.
A recent meeting of UCSCU and the Uganda Cooperative Alliance with President Museveni and Speaker Anita Among saw the president direct an extension of the BoU deadline, among other developments like the tax on taxes. Currently, the BoU-licensed SACCOs are EBO Sacco, based in Mbarara, Kyazanga-Kwegatta Microfinance and Sacco, and MADFA (Masindi District Farmers Association) Sacco..
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