Bank of Uganda moves to regulate 90 large Saccos

KAMPALA, Uganda — The Bank of Uganda has notified more than 90 large savings and credit cooperative societies that they must apply for licenses to operate under central bank supervision, according to a new report.

The move marks an expansion of oversight for the cooperative financial sector, which has seen rapid growth in recent years. In its Annual Supervision Report 2025, the central bank said a market survey conducted in late 2024 identified dozens of societies that meet the criteria for regulation.

Under current regulations, a Sacco is classified as large if it mobilizes voluntary savings of more than 1.5 billion shillings and holds institutional share capital of at least 500 million shillings.

“All the identified qualifying large Saccos have been notified, in writing, and BoU is supporting the institutions through the licensing process,” the central bank said in the report.

Officials said the thresholds were established because organizations of this size pose higher risks to consumers and the broader financial system. The central bank aims to ensure these cooperatives meet minimum standards for governance, capital adequacy and risk management, similar to those required of traditional banks.

The transition to formal oversight began last year when the Bank of Uganda issued licenses to three large cooperatives: EBO Cooperative Savings and Credit Society, Kyazanga-Kwegatta Microfinance Cooperative Savings and Credit Society, and MADFA Cooperative Savings and Credit Society.

Four additional applications are currently under review.

Central bank officials said the shift is intended to be supportive rather than punitive. The bank plans to launch a sensitization campaign during the 2025-26 financial year to educate Sacco leaders and members on the implications of central bank supervision, which includes regular reporting and on-site examinations.

Saccos have become a cornerstone of financial inclusion in Uganda, providing credit to farmers, households and small businesses that may not have access to formal banking. However, as these cooperatives begin to handle billions of shillings in member savings, regulators have determined that lighter oversight is no longer sufficient to protect the public.