Uganda’s SACCO movement must strengthen governance and embrace technology to protect members’ savings and remain relevant in a rapidly changing financial sector, cooperative leaders have said.
The call was made during the 11th Annual National SACCO Conference organised by the Uganda Cooperative Savings and Credit Union (UCSCU) at Silver Springs Hotel in Bugolobi, Kampala, where leaders discussed the changing regulatory and financial environment facing SACCOs.
UCSCU Board Chairperson Col. Allan Kitanda said SACCO leaders must put ethics, integrity and good governance at the centre of their operations as the sector comes under increased regulatory scrutiny.
Kitanda said stronger governance is essential for protecting members’ money and maintaining public confidence in SACCOs.
“Good governance is not just a regulatory requirement but the foundation for public confidence,” Kitanda said.
He also urged SACCOs to embrace technology as financial services increasingly move to digital platforms.
“The increasing use of digital financial services means SACCOs can no longer depend entirely on traditional methods of managing members, savings and loans. Technology can enable SACCOs to improve record-keeping, communication with members, loan management and access to financial services,” he said.
Kitanda, however, noted that increased reliance on digital platforms also creates new risks, requiring SACCOs to strengthen cybersecurity, data protection and internal controls.
He urged leaders to ensure that innovation does not compromise accountability or the safety of members’ funds.
The push for greater use of technology comes as larger SACCOs prepare for tighter Bank of Uganda regulation, with institutions that meet specified thresholds expected to comply with registration and licensing requirements.
Kitanda said SACCOs should view regulation as part of efforts to strengthen the sector rather than as competition with commercial banks.
“We don’t have to compete with the commercial banks. We don’t have to compete with anybody because we supplement each other. SACCOS collect money; they take it to the banks, and the banks can do anything they want. We engage each other,” he said.
UCSCU Chief Executive Officer Dr Silvester Ndiroramukama said technology would also be important in attracting young people to the SACCO movement.
“We need to understand the expectations of younger members, provide convenient digital services and educate them on saving, collective investment and responsible borrowing,” Ndiroramukama said.
“SACCOs must therefore become more innovative if they are to remain relevant to a new generation of members.”
Ndiroramukama said the union was developing strategies to attract more young people to SACCOs, noting that the sector must adapt its services to changing member expectations.
Dr Fred Muhumuza, director of the MUBS Economic Forum, urged SACCOs to diversify their sources of income and strengthen financial education for members.
“Diversification can help SACCOs build resilience to shocks and create more opportunities to serve their members,” Muhumuza said.
Muhumuza also challenged SACCO leaders to keep members informed about developments in the economy, financial markets and technology.
“Members should not only be encouraged to save and borrow but should also understand the broader economic environment in which they operate. Regular communication can help members make informed financial decisions and understand how changes in inflation, interest rates, employment and technology can affect their finances,” he said.
Minister of State for Cooperatives Tom Alero Aza also urged SACCO leaders to strengthen governance, professionalise management and embrace digital technology.
“SACCOs have a critical role in mobilising savings, providing affordable credit, supporting Government efforts to move households from subsistence into the money economy and promoting agro-industrialisation,” Aza said.
She added that the growing role of SACCOs in financial intermediation comes with a responsibility to manage members’ funds professionally and transparently.
The conference emphasised that technology and innovation must go hand in hand with strong governance, cybersecurity, professional management and accountability if SACCOs are to expand their services without exposing members’ savings to new risks.
