Central Bank pushes ESG adoption, moves to formalise large SACCOs

The Governor of the Bank of Uganda, Michael Atingi-Ego, has unveiled new capacity-building initiatives aimed at strengthening sustainable finance and improving regulatory oversight across Uganda’s financial sector.

Speaking at an aBi Finance Partners meeting on Wednesday, Atingi-Ego officially launched the IFRS S1 and S2 Capacity Building Project in partnership with the Uganda Bankers’ Association, as well as the Tier IV Environmental, Social and Governance (ESG) Framework being implemented with the Association of Microfinance Institutions of Uganda.

The initiatives are expected to support financial institutions in adopting global sustainability disclosure standards while strengthening governance and risk management practices, particularly among microfinance institutions and savings groups.

Atingi-Ego commended both associations for their role in advancing sustainable finance, noting that collaboration between regulators and industry players is critical in aligning Uganda’s financial system with evolving global standards.

He also outlined the central bank’s strategy to bring large Savings and Credit Cooperative Organisations (SACCOs) under its supervisory framework, highlighting a flexible, supportive regulatory approach.

“We recognise that these institutions have deep roots in their communities but may lack the formalised systems expected under central bank supervision,” Atingi-Ego said. “Accordingly, we have adopted what we would call a nurturing regulatory posture—customising licensing requirements, providing training, and offering handholding support to help SACCOs build robust risk management, financial controls, and governance processes.”

The governor said formalising SACCOs under the regulatory framework would unlock significant benefits, including access to guidance from the central bank, improved financial reporting systems, and deposit protection of up to UGX 10 million through the Deposit Protection Fund of Uganda.

Additional advantages include integration into the credit information-sharing system via the Credit Reference Bureau, as well as access to subsidised financing under facilities such as the Agricultural Credit Facility and the Small Business Recovery Fund.

“These are not marginal improvements—they are structural enhancements that can catalyse growth and deepen financial inclusion,” he said.

The move comes as Uganda steps up efforts to align its financial sector with global sustainability frameworks while expanding access to formal financial services, particularly in rural and underserved communities where SACCOs play a pivotal role.