Bank of Uganda to regulate Saccos soon

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Ugandan government is considering assigning the Bank of Uganda the duty of regulating Savings and Credit Cooperatives (Saccos) because they hold a lot of money in deposits on behalf of their clients.

Julia Claire Olima Oyet, the chief executive officer of Deposit Protection Fund of Uganda (DPF), said that with a new regulator, the Saccos will then be required to take on deposit insurance covers to protect the depositors’ money.

She stated this during a media editors’ breakfast meeting held at Mestil hotel, Kampala on December 9, 2022.

She explained that by signing up to deposit insurance, it would mean the Saccos would start contributing the statutory premium of 0.2 per cent of their average weighted deposit liabilities of the previous year to the DPF.

Presently, Saccos are regulated by the Uganda Microfinance Regulatory Authority (UMRA), which reports to the ministry of Finance, Planning and Economic Development.

Meanwhile, Oyet allayed fears of depositors on mobile money services, saying the government has shielded them from risk in the unlikely event of a mobile money service provider having financial distress. She explained that the National Payment Systems Act, 2020 requires mobile money service providers to have their float reflected on their bank accounts and must be invested in government securities.