The Uganda Cooperative Alliance (UCA) is seeking a budget allocation of Sh12 billion to help mobilize resources for the re-establishment of a cooperative bank in the country. This request is part of the Ministry of Trade's key funding priorities for the 2025/26 financial year. Trade Minister Francis Mwebesa, speaking before the sector committee on January 15, 2024, explained that part of the funds will be used for education, auditing, and resolving disputes within cooperatives, as well as strengthening member engagement.
UCA, which represents cooperatives nationwide and has been the voice of the movement since its establishment in 1961, is pushing for the revival of the cooperative bank to better serve the sector's needs. UCA’s Secretary-General, Ivan Asiimwe, joined the Minister to present the proposal, stressing the importance of having a cooperative-run bank. State Minister for Cooperatives Fredrick Gume commended the initiative, stating that once revived, the bank would be fully owned by cooperators, ensuring that its benefits remain within the sector.
Gume also highlighted the historical significance of the cooperative bank, which was liquidated by the government in 1999. He called for a report on the liquidation process, noting that many unresolved issues remain. He pointed out that cooperatives had previously invested in the bank and in Bank of Uganda, but their assets were sold off with no formal accounting or resolution provided to the cooperators.
Cooperatives in Uganda have long struggled with access to affordable financial services, often relying on commercial banks whose high lending rates do not align with the cooperative model. Gume argued that the re-establishment of a cooperative bank would greatly support the sector’s development and economic progress. He suggested that if cooperators pooled their resources, they could easily meet the financial goal needed to establish the bank, citing examples of successful cooperative savings and groups like WAZALENDO and WALIMU.
Furthermore, Gume emphasized that the government should consider providing a subvention—not a loan—to help kick-start the bank, which the cooperators could repay over time. He referred to efforts made in the past, including a letter he sent to the late Governor of the Bank of Uganda, Prof. Tumusiime Mutebile, seeking support for the initiative.
A breakdown of the proposed Sh12 billion allocation revealed that Sh2.5 billion would be dedicated to establishing the cooperative bank, while Sh200 million would go towards organizing annual general meetings. An additional Sh1.5 billion would be used for profiling cooperatives across the country. Other costs include Sh180 million for international engagements and Sh350 million for office operations.
The revival of the cooperative bank is seen as a vital step in addressing the financial needs of Uganda’s cooperative sector, providing a more affordable and sustainable financial solution.
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