From Member-Owned to Central Bank-Supervised: What Large SACCOs Need to Know About Bank of Uganda Regulation.

Uganda's largest SACCOs now hold more member savings than some regulated financial institutions, yet until recently most sat outside central bank supervision. That is changing. On 28 September 2026, the Bank of Uganda (BoU) extended the licensing deadline for large SACCOs to 31 March 2027 and said there will be no further extensions. Below is the background, the legal framework, the licensing process and what comes after.

Why SACCOs are moving under the Bank of Uganda

SACCOs have grown from small member-run savings groups into substantial deposit-holding institutions. Regulators cite the risks that come with that growth. The push toward stronger oversight is aimed at protecting members' savings amid concerns over fraud, money laundering, weak governance and inadequate internal controls.

The international context matters too. The BoU Governor has warned that Uganda faces a Financial Action Task Force (FATF) mutual evaluation beginning in 2027. Weakly supervised, deposit-taking institutions are a clear exposure in any such review.

The legal framework

Several laws work together, and the split of responsibilities can confuse SACCO boards.

The Cooperative Societies Act (as amended in 2022). The Ministry of Trade, Industry and Cooperatives regulates cooperative societies under this Act. Registration with the Registrar of Cooperatives is the entry ticket for everything else.

The Tier 4 Microfinance Institutions and Money Lenders Act, 2016 – This Act provides for the licensing and management of tier 4 microfinance institutions and establishes the SACCO Stabilization Fund and a SACCO Savings Protection Scheme. It requires SACCOs to be registered societies and licensed under the Act.

The Microfinance Deposit-Taking Institutions (MDI) Act, Cap. 58. – This is the BoU's licensing and supervisory mandate. The Governor has confirmed that the applicable framework is the MDI Act, Cap. 58, together with the Micro-Finance Deposit-Taking Institutions (Registered Societies) Regulations, 2023.

The MDI (Registered Societies) Regulations, 2023 – Issued as Statutory Instrument No. 54 of 2023, these are the operating rulebook. They cover licensing, minimum capital, liquidity management and monthly returns.

The Attorney General's opinion. In January 2026, an opinion from the Attorney General affirmed that large SACCOs should fall under BoU supervision to protect members' deposits.

In practice, oversight remains divided among three bodies. The Ministry of Trade registers cooperatives, The Microfinance Regulatory Department at the Ministry of Finance handles Tier 4 financial services, and Bank of Uganda licenses and supervises the large deposit-taking SACCOs.

Who must apply

The BoU has said the regime applies to registered societies whose voluntary savings exceed Shs1.5 billion and whose institutional capital exceeds Shs500 million. Institutional capital includes retained earnings and reserves. Both thresholds must be met.

The BoU has also been clear about the consequences of non-compliance: operating without a licence is illegal and may lead to legal penalties. There is a practical dimension as well. The BoU has told banks and other regulated financial service providers to update their KYC practices and transact only with licensed registered societies and SACCOs. An unlicensed SACCO that qualifies risks losing access to its own banking relationships.

The licensing process, step by step

Based on the Act, the 2023 Regulations and BoU notices, the journey looks like this.

1. Confirm eligibility. Test your voluntary savings and institutional capital against the two thresholds using audited figures.

2. Obtain member approval. SACCO leaders have explained that under the Cooperative Societies Act, a decision to seek a BoU licence must be approved at an AGM. Plan the AGM early and keep proper minutes.

3. Collect and complete Form A. Eligible SACCOs obtain the application form from the BoU and complete it with supporting documents.

4. Submit to the BoU and pay fees. Applications go to the Non-Bank Financial Institutions Department at the Bank of Uganda. Published fees are an application processing fee of 100,000 shillings, a one-time licence fee of 500,000 shillings, and an annual renewal fee of 500,000 shillings.

5. Publish notice of application. The Regulations require public notice in a newspaper that an application has been submitted. After submitting the application, await BOU go-ahead to publish.

6. BoU assessment. The central bank is required to make a decision within six months of receiving complete documentation. In deciding, it considers the adequacy of the capital structure, members' savings and earning prospects of the registered society.

7. Licence and public notice. Once satisfied, the BoU informs the public that the society is now under the supervision and regulation of the Central Bank. The Governor recently reported that eight SACCOs are already fully licensed, 21 are at the final stage, and about 50 have picked application forms.

Documents required

Under the Regulations, an application must be accompanied by the following, and the BoU may ask for more:

• A copy of the certificate of registration issued under the Cooperative Societies Act
• Evidence that institutional capital is above UGX 500 million
• Evidence that voluntary savings exceed UGX 1.5 billion
• The business plan of the registered society
• Where applicable, copies of the registered society's policy documents or manuals

The Regulations also allow the central bank to reject an application, including for failure to submit all the required documents, false or misleading information, inadequate capital, or a non-viable business plan. In practice, the quality of your financial records, the AGM resolution, your governance documentation and the credibility of the business plan (including financial projections) decide how smoothly the application moves.

Compliance obligations after licensing

Getting the licence is the start. A licensed society moves to a supervisory relationship that is ongoing and data-heavy.

Capital. The Regulations set a minimum core capital requirement. They use a core capital to total assets ratio and include a capital adequacy schedule (Schedule 7) that feeds into regulatory reporting.

Liquidity. A registered society must have a liquidity and assets management policy and manage liquidity in line with prudent norms. This means board-approved policies, documented limits and evidence that they are followed.

Monthly returns to the central bank. A registered society shall submit monthly returns to the Central Bank, including capital adequacy and liquidity reports. Accuracy and timeliness become board-level matters.

Sound records and governance. The BoU has advised SACCOs to maintain proper financial records, train directors and staff in governance and risk management, and uphold ethical lending practices. In practice, expect closer scrutiny of board composition, committee effectiveness and the independence of internal audit.

AML/CFT and KYC. Given the FATF timeline, expect heightened attention to customer due diligence, transaction monitoring and suspicious-activity reporting.

Licence maintenance. The licence carries an annual renewal fee, and the BoU can act against institutions that breach conditions.

Where Nexia Uganda can help

Regulation is a change-management exercise as much as a legal one. Nexia Uganda works with financial institutions and can support large SACCOs at each stage.

Before you apply

• Licensing readiness assessment: a gap analysis against the Regulations, covering thresholds, records, policies and governance.

• Financial statement preparation and audit: reliable audited accounts to evidence savings and institutional capital.

• Business plan and financial projections: a credible, bankable plan and multi-year projections aligned to BoU expectations.

• Application file preparation: compiling and quality-checking documents so they are complete before submission.

During the application

• Policy and manual development: liquidity and assets management, credit, risk, AML/KYC, HR and procurement policies.

• AGM and governance support: documentation that helps members make an informed decision on the licensing resolution.

After licensing

• Regulatory reporting support: monthly returns, capital adequacy and liquidity computations, with controls to keep them accurate and on time.

• Internal audit and risk reviews: outsourced or co-sourced internal audit, credit portfolio reviews and internal control assessments.

• AML/CFT reviews: assessing whether your programme stands up to supervisory and FATF scrutiny.

• Board and management training: governance, risk and ethical lending for directors, supervisory committee members and staff.

• Tax and advisory: structuring advice as your operating model changes.

The bottom line

The 31 March 2027 deadline is firm by the BoU's own account. SACCOs that begin now can approach licensing as a chance to strengthen governance and earn members' trust. Those that wait risk a rushed application, a rejected file or disruption to banking relationships. If your SACCO meets the thresholds, start the conversation this quarter. Nexia Uganda is ready to help you get licence-ready and stay compliant.