Africa-Press – Uganda. Members of Uganda’s Savings and Credit Cooperative Organisations (SACCOs) have welcomed President Yoweri Museveni’s directive halting the regulation of SACCOs by the Bank of Uganda (BoU), describing the move as a major boost to the cooperative financial sector.
The directive followed a meeting held on January 29 between President Museveni and stakeholders from the Uganda Cooperative Savings and Credit Union (UCSCU), the Uganda Cooperative Alliance, and other sector players to discuss taxation and regulation of SACCOs.
During the meeting, the President directed that SACCOs should not be taxed and instructed BoU to relax its ongoing licensing drive targeting large SACCOs.
Keep ReadingHe further guided that BoU should limit its role to oversight functions, particularly monitoring money flows to combat financial crimes, rather than imposing regulatory frameworks that undermine the cooperative model.
Addressing journalists on Monday, UCSCU welcomed the President’s guidance, saying it would positively impact the operations of SACCOs nationwide.
“The President agreed that SACCOs should not be taxed and that the income tax exemption granted in 2017 should be extended. He emphasized that SACCOs are cooperatives and must not be regulated in a manner that ignores their unique nature,” UCSCU Board Chairperson Col. Allan Kitanda said.
Kitanda added that while the sector supports regulation, it has been hampered by excessive and overlapping supervision.
“We are not against regulation; we are for regulation. What we oppose is multiple regulators. Currently, SACCOs are regulated by the Ministry of Trade, the Uganda Microfinance Regulatory Authority, and the Bank of Uganda. This makes Uganda a case study in multiple regulation, which stifles growth,” he said.
According to Kitanda, the cooperative movement—now comprising more than 30,000 SACCOs across the country—prefers a single regulator that understands the cooperative model.
“These SACCOs, whether big or small, should be regulated by one body that understands who we are, how we start, and where we are going. That is how we will remove fear and enable our sector to grow to the next level,” he said.
On concerns related to money laundering, Kitanda said SACCOs fully support compliance with national and international anti-money laundering standards under the Anti-Money Laundering Act.
“The Financial Intelligence Authority is mandated by law to monitor money flows into and out of the country. We comply with these standards because criminal elements may attempt to use SACCOs as conduits for illicit funds,” he noted.
President Museveni also advised that a high-level stakeholders’ meeting, chaired by Speaker of Parliament Anita Among, be convened to agree on a harmonised, fair, and enabling regulatory framework for the SACCO sector.
UCSCU welcomed the directive, saying it reaffirms government’s commitment to financial inclusion and the protection of community-based financial institutions.
“We urge all SACCOs to remain calm, uphold professional conduct, and await further guidance from the Union. Together, we shall continue to build a strong, inclusive, and sustainable SACCO sector for Uganda,” the statement said.
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