We want one regulator, cooperatives tell government
Mr Ivan Asiimwe
What you need to know:
- Currently, there is a conflict in terms of supervision and regulation by three regulators namely: Bank of Uganda, Uganda Microfinance Regulatory Authority and the Ministry of Trade
Cooperative societies across the country want government to establish a single regulatory body to oversee their operations rather many.
Currently, there is a conflict in terms of supervision and regulation by three regulators namely: Bank of Uganda, Uganda Microfinance Regulatory Authority (UMRA), and the Ministry of Trade, which affects their operations.
Management challenges should be handled by government in order to realise its intended goal with the Parish Development Model.
Mr Ivan Asiimwe, the general secretary of Uganda Co-operatives Alliance, made the call during a national consultative meeting on policy consideration for Saccos in the country yesterday.
“We love regulation but it should not strangle these co-operative societies as the different regulators tend to charge us different amounts which leads to most Saccos closing,” he said.
According to him, government should borrow a leaf from Kenya which has a single regulatory body for co-operatives and Saccos.
He said a single regulator “will help in eliminating bureaucracy and different costs charged every year by different regulators.”
Mr Assimwe noted that, such exorbitant charges levied by these regulators cause some Saccos and co-operatives to collapse.
Currently, Bank of Uganda is developing regulations that will allow it to formally regulate selected Saccos.
The Central Bank is working with the Ministry of Finance and Justice and Constitutional Affairs to develop the Micro-finance Deposit taking Institutions Regulations 2021, that will pave way for the supervision of registered societies known as saccos.
The Financial sector is divided into four tiers each with specifications responding to varied groups within the same communities or economic sectors. Tier 1 – Commercial banks; Tier 2 – Credit Institutions and Finance Companies; Tier 3 – Microfinance Deposit-Taking Institutions (MDIs) and Tier 4.
Under Tier 4, there are microfinance institutions comprising of – Saving Credit and Cooperative Organisations (Saccos), non-deposit taking microfinance institutions and Self-help groups among others.
According to the Uganda Cooperative Savings and Credit Union Limited, there are 1,368 registered Saccos.
