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Bank of Uganda may soon regulate Saccos

Bank of Uganda is set to regulate such Saccos

Bank of Uganda is set to regulate such Saccos

Because savings and credit cooperatives (Saccos) hold a lot of money in deposits on behalf of their clients, the government is considering assigning the Bank of Uganda the duty of regulating these financial schemes.

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

“Government is concerned about the affairs going on among Saccos and would like to ensure their stability. So, the Saccos, at least the large ones, will soon be regulated by Bank of Uganda. It is in the pipeline,” Oyet said.

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.

She said that is the reason why when Africell exited the Ugandan market in 2021, there was no public outrage at all. Oyet explained that DPF’s engagement with the media had been “triggered by our desire to share with you organized and processed information about the concept of deposit insurance as part of our efforts to broaden awareness.”

She added: “Public awareness is one of the ways the DPF contributes to building public confidence in the financial system,” adding, “It is this confidence that attracts deposits into the formal financial sector and spurs economic growth through increased financial intermediation.”

jmusinguzi@observer.ug

 

Comments

0 #1 Wainanchi 2022-12-16 05:48
This is fantastic news for rural development of Uganda
Saccos are prime generators of economic promotion and booster of economic development but in the past were misused as in.many other cases.

Some people are selfish and greedy and do not care about broader picture

Now I hope all such characters will be netted by the stringent banking rules and will be disabled to loot and destroy economy.

I hope banks will find ways to put them behind bars and if they try to run ,police canine units will find them and arrest.
Enough of stupid games thieves and robbers.

Museveni oyeeeee,oyeeeee.
Applause from Wainanchi.
Bravoooooooooooooooo
ooooooooooopooo
Hshagshagahas gigiggi thieves.
Hahahaha
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