Trade ministry seeks sh12bn to revive cooperative bank

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Uganda Cooperative Alliance (UCA) is seeking an allocation of sh12b for mobilisation efforts to establish a cooperative bank in Uganda. This revelation is contained in the Ministry of Trade’s list of critical funding priorities for the 2025/26 financial year.

Appearing before the sector committee chaired by Sylvia Nayebare (Gomba District Woman MP, NRM), on Wednesday, January 15, 2024, trade minister, Francis Mwebesa, explained that a portion of the funds would also be directed towards member education, the auditing of cooperatives, and resolving intra and inter-cooperative disputes through arbitration.

Also present was Uganda Cooperative Alliance (UCA) secretary general, Ivan Asiimwe.

UCA, an umbrella organisation for all cooperatives in Uganda, was established in 1961 and serves as the voice of the cooperative movement at both the national and international levels. It has a mandate to advise the government on policy matters.

State minister for cooperatives, Fredrick Gume, commended the establishment of the Cooperative bank, calling it timely and essential for the sector. He emphasised that the bank, once revived, will be fully owned by cooperators.

In addition, Gume called on the government to provide a report on the closure of the old cooperative bank in 1999, citing lingering issues that have not been addressed.

“It's not news that these cooperators had their own bank, but it was liquidated by the Government. This is a delicate scenario…We liquidated a bank by Bank of Uganda and assets of the cooperators, and their branches were sold but up to now, we have not received a report of the liquidation. They also had shares in Bank of Uganda where they put their initial money,” Gume pointed out.

Minister of state for Cooperatives, Frederick Gume, and the minister for trade, Francis Mwebesa, before the committee on trade at parliament on Jan. 15, 2025. (Credit: Maria Wamala)

For years, cooperatives have relied on commercial banks, whose lending rates have often proven unfriendly to the business models of these entities.

According to Gume, the coming together of cooperators under one bank shall tremendously spur development and socio-economic development.

“These cooperators, look at WAZALENDO, do you know how much money they have? WALIMU, EXODUS SACCO for Police. If they had organised to bring this money together...because they are keeping it in commercial banks. If they bring this money, they will hit the target to establish a cooperative bank. But the question is how you start out. We have gone ahead; the cooperators have resolved. We have over 14 million cooperators if each cooperator contributed only sh10,000,” he cited.

Gume told MPs that while the late Prof. Tumusiime Mutebile was still the governor of the central bank, he had written to him, but his efforts were in vain.

“If Government can give a subvention, not a loan to kick-start the cooperative bank, they will pay it back,” he appealed.

“It’s not news that these cooperators had their own bank, but it was liquidated by the Government. This is a delicate scenario…We liquidated a bank by Bank of Uganda and assets of the cooperators, their branches were sold but up to now we have not received a report of the liquidation. They also had shares in the Bank of Uganda where they put their initial money,” Gume pointed out.

Financial breakdown

Documents submitted by UCA Secretary General, Ivan Asiimwe, reveal that of the sh12b, sh2.5b will be allocated to spearheading the establishment of the cooperative bank, while sh200m will be earmarked for conducting the annual general meeting. An additional sh1.5b will be used for profiling cooperatives across the country.

Other allocations include sh180 million for attending international meetings and Sh350 million for office operations, among other expenses.