Cooperators Raise Concerns over Tier4 and Money Lenders Act 2016 and the MDI Amendment Bill and Regulations

On 30th April 2018, Uganda Cooperative Alliance Ltd (UCA) held a consultative dialogue at the UCA Headquarters in Kampala that attracted representatives of SACCOs, SACCO unions, Legal fraternity, Media representatives, Development Partners and other Civil Society organizations.

The dialogue attracted a total of 30 participants from across the country and represented all categories of SACCOs from the big ones to the smaller ones. The dialogue was organized in line with UCA`s mandate under section 4 part 2. 28 and 29 of the cooperative societies Act 1991 which empowers UCA to represent the views of its members.

Fr. Gaetano Chairman Rukiga SACCO addressing participants

In the build up to the implementation of the Tier 4 microfinance and money lenders ACT 2016 and the MDI Amendment Bill and regulations, the stakeholders in the cooperative sector, more particularly SACCOs, raised concerns regarding the ACT, the proposed MDI Bill and regulations all of which are really unfavorable for SACCOs business.

Overall, the major concerns stem from the fact that regulation of financial Cooperatives (SACCOs) will be done in a manner that makes them lose their identity as “cooperatives” and more significant is the fact that Tier 4 Microfinance and Money Lenders ACT 2016 mainly focuses on licensing of SACCOs and less on the operations of the institutions.

The ACT 2016 disempower the members who are the “only owners, only users and only direct beneficiaries” of the SACCOs and vests most of the power to the Central Bank and UMRA to which the cooperators are not even given any form of representation.

According to cooperators, this defeats the real principles of cooperation and focuses more on elements of business of organizations. Indeed, most of the provisions in the regulations are more applicable to companies and commercial banks or microfinance institutions as opposed to financial cooperatives.

CEO Wazalendo Sacco Brig Simon Ocan presenting on Implications of the amended MDI Bill.

It is also evident that during the process of formulating the laws input from the cooperators was sought and provided but ignored thereby enacting a law that would not promote the cooperatives.

The above and other concerns informed a stakeholder consultative dialogue organized by Uganda Cooperative Alliance, the National apex of cooperatives mandated by the Cooperative Act of 1991 to advise government on cooperative development policies in Uganda.

Finally During the dialogue members came up with several recommendations and to pursue them two committee were set up to do further analysis and later one lobby committee composed of cooperators and lobbyist who would draft a petition to be shared with government.

 

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