“Reimagining SACCOs as Engines of Inclusive and Sustainable Development”

By Esther Wodulo

As Uganda continues its journey toward inclusive economic growth, Savings and Credit Cooperative Organizations (SACCOs) are increasingly emerging as powerful instruments for advancing financial inclusion, poverty reduction, and gender equality. Once viewed primarily as community-based savings groups, SACCOs are now strategically positioned to drive household transformation and contribute meaningfully to national development goals.

According to estimates from the Microfinance Support Centre and the Uganda Cooperative Alliance, Uganda has more than 11,000 registered SACCOs. However, only about 5,000 to 6,000 are fully active and operational. This gap represents more than an administrative challenge; it reflects the difference between unrealized potential and effective contribution to Uganda’s socio-economic transformation agenda.

Having worked closely with SACCO members and cooperative institutions for over a decade, I have witnessed firsthand the transformative potential of cooperative finance in fostering resilient livelihoods and stronger communities. SACCOs have evolved beyond mobilizing savings and extending credit to become engines of inclusive, sustainable development that expand economic opportunities and empower people to build a better future.

The importance of strengthening SACCOs becomes even clearer when viewed against Uganda’s poverty landscape. While the country has made notable progress in reducing poverty, significant challenges remain. Data from the Uganda Bureau of Statistics (UBOS) indicates that approximately 20 percent of Ugandans still live below the national poverty line, with rural women and female-headed households bearing a disproportionate share of this burden.

In his 2026 State of the Nation Address, President Yoweri Museveni emphasized that Uganda’s economic transformation will only be fully realized when households transition from subsistence production into the money economy. Government initiatives such as the Parish Development Model (PDM) and Emyooga are designed to support this transition by promoting enterprise development, wealth creation, and household income generation. However, without strong grassroots financial institutions to sustain and manage these investments, such programmes risk becoming short-term liquidity injections rather than catalysts for lasting transformation.

The relationship between poverty and gender inequality is no longer a theoretical discussion; it is a structural reality. Many women continue to face barriers including limited access to affordable credit, challenges in land ownership, and underrepresentation in financial decision-making structures. Nobel Prize-winning economist Esther Duflo argued that empowering women is not merely a social objective but an economic necessity. When women gain access to financial resources and leadership opportunities, the benefits extend to families, communities, and national economies.

Uganda can draw valuable lessons from neighboring countries. In Rwanda, deliberate policies promoting women’s participation in cooperative leadership have contributed significantly to economic resilience and post-conflict recovery. Kenya’s SACCO sector has expanded financial access through the integration of digital finance and mobile money platforms such as M-Pesa, enabling millions of people, particularly women entrepreneurs, to access financial services conveniently. Tanzania’s agricultural cooperatives have similarly enhanced women’s participation in value chains such as coffee, dairy, and horticulture production.

Despite their potential, Uganda’s SACCOs continue to face several persistent challenges. Weak governance structures, inadequate financial literacy among members, limited digital adoption, and cultural barriers that restrict women’s leadership opportunities continue to hinder growth. In some cases, mismanagement and lack of accountability have eroded member confidence and weakened the credibility of SACCOs as trusted financial intermediaries.

To reposition SACCOs as true engines of equitable development, several reforms deserve urgent attention. First, the digitization of SACCO operations should be accelerated to improve transparency, efficiency, and accountability. Second, financial literacy programmes must be expanded nationwide, with particular emphasis on women and youth. Third, governance frameworks should actively promote gender-responsive leadership and decision-making. Finally, stronger regulatory oversight and institutional capacity-building support through agencies such as the Microfinance Support Centre are necessary to rebuild trust and strengthen operational effectiveness.

The future of Uganda’s inclusive growth agenda will not be determined by policy pronouncements alone. It will depend largely on the strength and effectiveness of community-based financial institutions that translate national aspirations into household-level outcomes. SACCOs must therefore be reimagined not as optional community groups but as strategic development platforms capable of bridging the gap between government wealth creation programmes and sustainable economic empowerment.

With deliberate policy support, strong leadership, enhanced accountability, and a commitment to gender inclusion, SACCOs can become powerful engines of equitable development, helping Uganda achieve both poverty reduction and gender equality while ensuring that no community is left behind.

The writer is the Member Relations Officer at UN Staff SACCO.

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