Africa-Press – Uganda. The Uganda Microfinance Regulatory Authority (UMRA) has warned Saccos and microfinance institutions to be on lookout or else they might be targeted by money launderers.
Microfinance and saccos are no longer that informal sector we all knew where we did whatever we wanted. The sector has evolved and we now have emerging trends like anti-money laundering which have come in,” said Sheila Birungi, the head of the legal department at UMRA.
Birungi who also sits on the Uganda anti money laundering task force was speaking during the launch of the Microfinance and Saccos Governance Forum in Kampala organised by the Uganda Institute of Banking and Financial Services (UIBFS).
In the past, financial institutions have been warned that recent advances in technology and globalization have offered and will continue to offer more sophisticated means to convert ill-gotten proceeds to legally acceptable finance assets as they provide an entry point for laundered money into the financial system.
The head of the legal department at UMRA who also sits on Uganda’s Anti Money Laundering taskforce asked microfinance institutions and saccos to be alive to changing trends in the world as they do their work.
“Microfinance is evolving and we now have trends like environmental, social, and corporate governance (ESG) and it is no longer that informal sector that we did what we wanted and also rip off the ordinary Ugandans. You are to protect Ugandans’ savings and oversee their money.”
She noted that there are many challenges facing microfinance institutions and saccos, noting that these need collective action to overcome them.
The head of the legal department at UMRA emphasized the need for good governance.
“Governance is a concept which has been here for many years but few practice it. Good governance benefits everyone in the different segments of the economy. Indeed good governance enhances a common good other than diminishing it .It is necessary to broaden scope to include all stakeholders involved.”
Goretti Masadde, the chief executive officer of the Uganda Institute of Banking and Financial Services also underscored the role of good governance for saccos and microfinance institutions, saying sustainability is no longer about ways of making profit but ensuring good governance that caters for people and the environment.
Massade said that environmental, social, and corporate governance (ESG) is increasingly becoming part of the business operations globally, and that financial institutions just like any other sector, can only embrace it for their sustainability.
According to Massade, the forum was meant to educate the leadership of micro finance and SACCOs how to deal with each other as well as clients in a way to helps them grow.
She said the meeting was meant to ensure leaders of microfinance institutions share ideas as well as learn from their partners among them Microfinance Regulatory Authority and Microfinance Support Center which were part of the forum.
Source: Nile Post
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