Speaker gives large SACCOs more time to meet Bank of Uganda licensing rules

KAMPALA – Speaker of Parliament Jacob Marksons Oboth has directed the Ministry of Finance to begin drafting amendments to the law governing savings and credit cooperatives (SACCOs), and has given large SACCOs more time to comply with Bank of Uganda (BOU) licensing requirements.

The directives were issued at a meeting in Parliament on Wednesday. It was attended by BOU Governor Michael Atingi-Ego, cooperative leaders and officials from the Ministry of Finance and the Ministry of Trade.

The meeting followed a petition from the Uganda Co-operative Savings and Credit Union Limited (UCSCU) against a BOU directive requiring large SACCOs to apply for licences by 30 September 2026.

BOU had warned that SACCOs without licences by 1 October 2026 would be cut off from the commercial banking system, including access to bank deposits and mobile money transactions.

Atingi-Ego said the central bank was enforcing the Microfinance Deposit-Taking Institutions Act and the 2023 regulations.

“This matter got to President Yoweri Museveni and a few things were agreed upon. But the law is clear. If we do not adhere to the deadline, the country will be moved into the grey zone and this is not good for the economy,” Atingi-Ego said.

He said eight SACCOs had been fully licensed, 21 were at the final stage of the process and about 50 had picked up application forms.

Atingi-Ego also warned that Uganda faces a Financial Action Task Force (FATF) mutual evaluation beginning in 2027. Uganda was removed from the FATF’s list of jurisdictions under increased monitoring, commonly known as the grey list, in February 2024.

“We run a risk of this country going back to the grey list. We cannot have big financial institutions hanging in the air,” he said.

UCSCU Chief Executive Officer Sylvester Ndiroramukama said SACCOs were not opposed to regulation but wanted a harmonised system.

“It is not true that SACCOs do not want to be regulated. We actually want to be regulated, but we want regulation which is harmonised,” Ndiroramukama said.

He said SACCOs are currently regulated under different laws and by different government institutions, which he said creates confusion.

Ndiroramukama added that many SACCOs could not meet the deadline because a decision to seek a BOU licence must be approved at an annual general meeting, and most of these are held around March.

Oboth said the conflicting legal requirements needed to be resolved through legislation.

“When two laws conflict or contradict each other, you need a Speaker to speak to both sides so they can see the difference, and everyone is left happy,” he said.

He directed large SACCOs to pick up licensing application forms within seven days. He said those making genuine efforts to apply by 31 March 2027 should be considered under phased compliance, and proposed 30 June 2027 as an outer limit.

Oboth also directed the Minister of Finance to initiate an amendment Bill to harmonise the legal framework and establish a regulatory regime specific to SACCOs.

Atingi-Ego cautioned that any extension must be matched by concrete action from SACCOs, and said BOU’s regulatory position remains in force.

Oboth further directed that a taskforce previously set up to develop counter-proposals to BOU’s position be reinstated to follow up on the agreed measures.