Bugisu Cooperative Union offices
Co-operators have renewed calls for government to streamline regulation of Savings and Credit Cooperative Organizations (SACCOs), warning that multiple regulators are undermining the growth and sustainability of the sector.
The appeal dominated speeches on Friday as Kitgum Cooperative Savings and Credit Society Limited (Kitgum SACCO) marked its 25th anniversary.
The event, celebrated under the theme “25 Years of Growth, Service, Resilience and Positive Impact,” attracted government officials, municipal leaders, co-operative unions and representatives from the Bank of Uganda and the Ministry of Trade, Industry and Cooperatives.
Andrew Mugumya, Northern and Eastern Regional Coordinator for the Uganda Cooperative Savings and Credit Union (UCSCU) issued a strong call for a harmonised SACCO regulation. He said SACCOs are currently supervised under several laws and bodies, including the Cooperatives Act, Bank of Uganda under the Tier 4 Microfinance Act, and other agencies, creating confusion and compliance burdens.
“Our position as the union is not that we don’t like regulators, but the issue is that the regulation of all SACCOs should be harmonized because we are twins,” he said.
Mugumya also appealed to the government to continue waiving taxes on SACCOs to reduce their operation costs so that they give loans to the rural poor at affordable interest rates.
He noted that although SACCOs got a tax waiver in 2017 it is closing in 2027 and should therefore be completely lifted. According to Mugumya the tax waiver helped Kitgum SACCO open branches in seven other areas in East Acholi and support more communities.
“We believe that when SACCOs are not paying tax, then it is us, it is your voters, it is the Wananchi that are benefiting a lot because that’s the way operational costs are very reduced, are minimized,” he said.
Speaking on behalf of the Central Bank, Paul Owembabazi, from the Non-Bank Financial Institutions Department acknowledged concerns over fragmented regulation but clarified that Bank of Uganda is implementing the law as passed by Parliament.
Owembabazi outlined benefits of formal regulation, including access to agricultural credit facilities, improved public confidence, stronger governance, and coverage under the Deposit Protection Fund once licensed.
“Once you are regulated, your money is safe,” he said, adding that licensed SACCOs have registered growth in savings.
Rosette Arujo, representing the Ministry of Trade, said government is already reviewing conflicting SACCO regulations and working with Parliament to amend the law to streamline supervision.
She also reaffirmed the Ministry’s role in supporting co-operatives through training, inspections, arbitration and facilitating access to low-interest loans through the Microfinance Support Centre.
Beatrice Atim Anywar, the State Minister of Water and Environment, who represented President Yoweri Museveni at the event, promised to take the requests of the cooperators to cabinet on Monday.
“Let us continue requesting for a tax holiday so that you get more profits from the SACCOs and subsequently benefit the grassroots communities,” Anywar said.
Kitgum SACCO which was started in 2000 with 70 members has grown to more than 23,000 savers, expanding across Kitgum, Lamwo, Agago, Pader and parts of Karamoja and West Acholi.
Rev. Sam Obol, one of the founding members, recalled that Kitgum SACCO was established to provide affordable credit for rural communities, stimulate income-generating activities and break what he described as “the old vicious circle of low income, low investment and low savings.”
Since its registration in 2001, Kitgum SACCO has grown its financial base to over Shs 3 billion.
-URN
