Sunday, February 5, 2023
Home > Banking > Self-Help Groups To Register Before They Are Allowed To Operate — Gov’t
BankingNews

Self-Help Groups To Register Before They Are Allowed To Operate — Gov’t

Minister Haruna Kasolo flanked by UMRA ED Edith Namugga Tusuubira launching the guidelines

The government has directed all Self-Help Groups (SHGs) to register before they are allowed to operate.

The Minister of State for Finance, Haruna Kasolo said this has been done to safeguard people’s savings in these groups. Speaking on Tuesday at the Uganda Media Centre in Kampala while launching the operation guidelines that will be followed by these groups, Kasolo said they want to eliminate the practices of SHGs leaders running away with people’s money.

“We used to have problems with Saccos where leaders connive and swindle people’s savings. But after the creation of UMRA-Uganda Microfinance Regulatory Authority, we no longer have cases of people swindling people’s savings,” Kasolo said adding that such cases are now common with the SHGs because they have been working without any regulations.

Kasolo added that the government in 2019 launched the Emyooga program which was meant to transform 68% of households from subsistence to market-oriented production with the overall objective of promoting job creation and improving household incomes. This program led to the establishment of 205,710 parish-based associations consisting of a total membership of 4,114,200 members. All these associations and any others are supposed to register starting January next year.

“With the Parish Development Model, we are going to have a Sacco at every parish and we shall have different Saccos in these groups therefore, it is very important that government ensures that people’s money in these organizations is safe. We encourage all Ugandans to join groups and use the money as a revolving fund so that every day you can earn money because if you can’t earn, you are contributing nothing towards the development of the economy and I don’t think you have any moral authority to ask any service from the government,” Kasolo said.

Asked whether UMRA has the capacity to regulate all these organizations, Kasolo said his government will provide the necessary resources to ensure that UMRA carries out its mandate.

He called upon UMRA to open up offices in every district to ensure that there is compliance with the guidelines.

Edith Namugga Tusuubira, the Executive Director of UMRA, said the regulations will ensure that all SHGs work within the set guidelines. She said these regulations are meant to operationalize the provisions of the Microfinance Act which establishes the Tier Four financial institutions in which SHGs fall.

She added that in some parts of the country like Karamoja, such saving groups are the only available financial institutions because commercial banks fear opening up branches there.  “People have organized themselves through these groups; so, it creates us a big role to protect that money,” Namugga said.

Any SHGs that fail to adhere to the guidelines, Namugga said, the leaders will be liable to punitive action laid down in the Tier 4 Microfinance Institutions Act and Money Lenders Act 2016.

Asked about how much money these groups will pay for registration, Namugga said, the Minister of Finance and Economic Development will come out with a statutory instrument laying out the fees that would be paid across the country. Currently, any SHGs that want to register are charged differently depending on the local government where it is located.

-URN

Leave a Reply

Your email address will not be published. Required fields are marked *