How To Form A SACCO In Uganda

How To Form A SACCO In Uganda

A SACCO (Savings and Credit Cooperative Organization) is a group of people with similar interests who come together to form a credit union. The union is registered with the Ministry of Cooperatives, which in turn authorizes the SACCO to receive deposits and provide loans to its members.

In this article, Ugandafact.com tries to answer the question by publishing How To Form A SACCO In Uganda

Below are How To Form A SACCO In Uganda

SACCOs are a unique, democratic, member-driven, and self-help cooperative organization where members agree to save their money together and offer loans to each other at reasonable rates of interest. Interest is charged on loans, to cover the interest cost on savings and the cost of administration. SACCOs are a great way to save money and grow your income base.

To form a SACCO, members must satisfy the conditions under S. 4 of the Cooperative Societies Act. A SAACO must be comprised of at least 30 members, and all must be qualified by S.13 of the Act. Said member to qualify must have attained the age of 18 years and should be a resident or in occupation of land within the society’s area of operation.

REQUIREMENTS

A SAACO is a legal entity and therefore is required to satisfy all the legal requirements to be registered.

1. Name of community

Like anything, the name of any organization or company is the most important thing. While picking a name, the law requires that said name should reflect elements of domicile, and economic activity of its members and should bear the words Saving and Credit Cooperative Society.

2. Members

The minimum number of members required to start a SAACO is thirty members. This means that once a group has below 30 members/ individuals, it cannot register as a cooperative company. The beauty of it all is that the law does not really provide for an upper cup and therefore the members can be as many as possible.

Another major requirement for members is for them to have a common bond with other members. A person should either be a resident or own land in the area where they are registering the cooperative society. This is a form of accountability for members and makes it easy for members to trace each other in case loans are taken on and members disappear without a known identity. 

Requirements for Registration of a Cooperative Society

A license or Permit to operate a SACCO can be obtained from Uganda Microfinance Regulatory Authority. A SACCO shall not carry on the business of financial Services unless it is

  1.  A  registered society
  2. Licensed under the Act.

Prepare the necessary background and relevant information then fill up the appropriate application form as described by the Microfinance Regulatory Authority. The documents to be attached to the application form include:

  1. a certified copy of the certificate of registration issued under the Cooperative Societies Act;
  2. the organizational structure and management of the registered society;
  3. the business plan of the registered society;
  4. the credit policies and lending policies of the registered society.

After filling out the form proceed to pay the prescribed fee. Submit the duly filled-in form and attached it with the pay slip to the Finance Officer in charge of SACCO Registration.

Ensure that the application fee is submitted and all required information is included with the application.

Collect your SACCO License certificate from where your application was submitted within 21 days from the date the application was received at Microfinance Regulatory Authority in case there is no rejection.

Instructions To Register SACCO In Uganda

  •  Before applying for registration, know the type of society you would like to register.
  • Members should be twelve (12) years and above.
  • Ensure that all members pay membership fees and deposit their share capital before applying for registration.
  • The membership fees and share capital to be contributed should be determined based on the members of the society intending to register.
  • Ensure that the society meets the minimum numbers required for registration.
  • Ensure that the cooperative society is registered to function under specified principles of societies in Uganda.
  • Recommendations by the District Commercial Officer (DCO) are based on interim operation reports of cooperatives.
  • Cooperative members are advised to open up a bank account for the cooperative during the process of registration.
  • A bank account with at least three (3) signatories.