BOU Considers Proposal To Fund SACCOs To Become Money Lending Institutions
Bank of Uganda is considering giving money to Savings and credit Cooperative Societies (SACCOS) as lending financial institutions through which money would be lent to small businesses across the country under the supervision of Bank Of Uganda.
According to Winnie Muliisa, the Head of Disbarment and Recovery at the Bank of Uganda, discussions are ongoing between the Ministry of Finance and the Bank of Uganda to bring SACCOS on board as a lending institution under the Agriculture Credit Facility, a fund or a special innervation that was introduced in 2009 to bridge the financing gap between the agricultural sector and the commercial banks to increase access to low interest loans.
More About SACCOS
SACCOS are an essential part of the financial sector in Uganda and are member-based financial cooperatives that offer a range of financial services to their members. These services typically include savings, loans, and other financial products. Here are some key points about SACCOS in Uganda.
SACCOS are typically formed by individuals who have a common bond, such as working in the same profession, residing in the same community, or belonging to the same social or religious group. Members pool their resources, primarily savings, to provide affordable credit and other financial services to one another.
SACCOS provide a range of financial services to their members, including savings accounts, fixed deposits, and various loan products. These services are often designed to meet the financial needs of their members, including personal loans, education loans, and agricultural loans.
SACCOS play a crucial role in promoting financial inclusion and community development in Uganda. They offer an accessible and affordable alternative to traditional banks for individuals and small businesses, particularly in rural and underserved areas.
SACCOS in Uganda operate under a democratic structure, with members having a say in the organization’s governance and decision-making processes. Members elect a board of directors and other officials to manage the SACCOS and make financial and operational decisions.
SACCOS are an important part of Uganda’s financial landscape, helping to promote financial inclusion and providing a valuable means for communities to save, access credit, and improve their economic well-being.
While SACCOS can be a valuable resource for their members and communities, they face various challenges, including limited access to capital, governance issues, and the need for capacity-building and training. Regulatory compliance and fraud prevention are also areas of concern.
SACCOS in Uganda are regulated and supervised by the Uganda Cooperative Savings and Credit Union Limited (UCSCU) and the Bank of Uganda. This regulatory framework ensures that SACCOS operate in a safe and sound manner, protecting the interests of their members.
