Ugandan Government to Set up Laws for Regulating its Microfinance Sector

Guest post by: David Satterthwaite
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Ugandan Government to Set up Laws for Regulating its Microfinance Sector - By David Satterthwaite

Currently, SACCOs are not regulated by the government and are the only financial institutions which do not have to be licensed by the Bank of Uganda to take deposits. There are around 500 existing SACCOs of which 300 are active. Most of these are recent developments of the “Prosperity for All” program (Bonna Bagaggawale) created during the 2006 Ugandan elections and launched in February 2007 as an all encompassing program aimed at boosting the country’s economy through measures including microfinance, increased production, agroprocessing and marketing.

The EU, which has supported the microfinance sector in Uganda since 1999, has recently contributed assets worth USD 176,470 to be used toward the implementation of a national policy to develop and regulate SACCOs. The Delegation of the European Commission to Uganda has urged the Ugandan government to develop a Savings and Credit Cooperative Organizations (SACCOs) Act and an independent regulatory body to guarantee their independence.

The Uganda Cooperative Savings and Credit Cooperative Union has been designated by the government to lead in the development of SACCOs under the new regulations effective as of June 2008. The government plans to have one thousand active SACCOs spread over every sub county, providing access to microfinance services throughout the country. The new regulations are intended to protect member savings and generate confidence in the microfinance sector. Further details are currently unavailable.

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Ugandan Government to Set up Laws for Regulating its Microfinance Sector - By David Satterthwaite

About the Author: David Satterthwaite

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David brings 10 years of experience in microfinance management, social entrepreneurship, non-profit management/fund-raising and microfinance investment research. David is the Chairman and President of Prisma Microfinance, Inc., a retail “microbank” operating in Central America. He is also Chief Editor of MicroCapital.org, a news and information service for the microfinance community and its investors. Each month, MicroCapital.org publishes the MicroCapital Monitor, the leading industry newspaper. David writes and speaks frequently on microfinance. He has been a quest speaker at many events, including: Microcredit Summit 5+: Panel on Private Investment, Milken Institute Global Conference, United Nations Year of Microcredit Symposium for Wall Street, Chicago Conference on Microfinance, Harvard Social Enterprise Conference, Dartmouth’s Business Sustainability Conference, Wharton’s Conference on Social Entrepreneurship, Stanford’s Social Enterprise Club, Columbia’s Social Enterprise Program and the Net Impact Annual Conference. Through his work with Prisma and MicroCapital, he has been featured or quoted in The Wall Street Journal, the Boston Globe, “All Things Considered,” Reuters and SocialFunds.com. David has been recognized with the Compaq Computer Corporation Leadership Award, the City Year Inspiring Leader Award and the National Social Venture Business Plan Competition award for Best Social Impact Analysis. David has supported many non-profit and for-profit social enterprises in different capacities, including Access Technology Learning Center, Agora Partnerships, Bridges to Business, City Year, Fonkoze, Kiva and National Social Venture Competition. David holds a B.A. with Honors in Political Science from Haverford College.
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