Speaker Oboth Mediates Bank of Uganda and SACCO Licensing Dispute

Speaker of Parliament Jacob Marksons Oboth has successfully brokered a resolution to a significant impasse concerning the licensing of Savings and Credit Cooperative Organizations (SACCOs) by the Bank of Uganda (BOU). The intervention came after the Uganda Co-operative Savings and Credit Union Limited (UCSCU) petitioned Parliament regarding stringent licensing requirements set by the BOU.

During a high-level meeting convened at Parliament, attended by BOU Governor Michael Atingi-Ego, cooperative leaders, and representatives from the Ministries of Finance and Trade, Oboth directed the Ministry of Finance to commence the process of amending the relevant legislation. This move aims to harmonize the regulatory framework for SACCOs and provide a more manageable compliance pathway.

The dispute arose from a BOU directive mandating large SACCOs to apply for licenses by September 30, 2026, with a threat of exclusion from the commercial banking system for non-compliant entities. BOU Governor Atingi-Ego emphasized the urgency, citing the Microfinance Deposit-Taking Institutions Act and 2023 regulations, and warned of potential negative impacts on Uganda’s economy and its standing with international financial bodies like the Financial Action Task Force (FATF).

UCSCU’s CEO, Sylvester Ndiroramukama, clarified that SACCOs are not against regulation but expressed concerns over conflicting legal frameworks and the impracticality of meeting the BOU’s deadline, as key approval processes often coincide with Annual General Meetings held later in the year.

Speaker Oboth’s directive allows SACCOs an extended period to comply, with a proposed outer deadline of June 30, 2027, for those making genuine efforts to apply. He also called for the reinstatement of a previously formed taskforce to oversee the implementation of the agreed roadmap and ensure a unified approach to SACCO regulation. While BOU acknowledged the extension, it stressed that compliance actions from SACCOs must run parallel to the extended timelines.

This development aims to balance regulatory oversight with the operational realities of SACCOs, ensuring financial stability without unduly hindering their functions.

Source: Parliament of Uganda