BOU can promote Saccos without regulating them

What the report says

The Observer published a commentary arguing that the Bank of Uganda should support savings and credit cooperatives, or Saccos, and similar registered lending firms without bringing them under the central bank’s direct regulation. The piece says the proposed oversight would stretch the bank’s mandate and could risk slowing down lenders that it portrays as responsive to grassroots borrowers and small businesses.

Using Letshego as an example, the author describes a long-running relationship with the lender that began with a relatively small loan and helped expand a business over time. The commentary credits quick loan processing, repayment grace periods and accessible terms with supporting enterprise growth, job creation and tax contributions. It presents these lenders as particularly useful for small and medium-sized businesses that may struggle with more formal banking procedures.

The article also points to Kenya as a comparative case, saying Saccos there have remained important to household and business finance under a model that includes sector-specific oversight rather than direct central bank control. In that context, the author argues that Uganda could gain more by partnering with Saccos than by restricting them. The wider policy question matters because it touches on financial inclusion, SME lending and how to balance consumer protection with access to credit.