Government Set up Committee to Revive the Cooperative Bank of Uganda

…The committee set up to investigate the project is made up of leading co-operators and aims to learn from the mistakes of the previous co-op bank

The Ministry of Trade, Industry, and Cooperatives together with the Uganda Cooperative Alliance, has kicked off a process of reviving the defunct cooperative bank.

The bank was established in the 1960s as a commercial bank, but later closed on May 19, 1999, over alleged mismanagement and since then, efforts to revive it have been ongoing.

The Ugandan government has announced the formation of a committee tasked with spearheading the development of a Ugandan National Cooperative Bank.

Speaking at the launch of the committee last week at the Ministry of Trade boardroom in Kampala, the Minister of State for Cooperatives, Fredrick Gume Ngobi implored them to develop a roadmap for the consultations.

He said that they had received “overwhelming support” from the cabinet to pursue the formation of a cooperative bank.

The committee is made up of 14 members across seven organizations: Uganda Central Cooperative Financial Services, Uganda Cooperative and Savings Union, Walimu, Wazalendo, two parliamentary savings and credit co-ops (SACCOs), and national apex Uganda Cooperative Alliance (UCA), which will chair the group. 

The aim of the bank will be to serve Uganda’s SACCOs in a tailored way, with profits returning back to the cooperative members. 

UCA’s Austin Nyakubaho said at the inauguration that the main goal of the committee will be to lay out a plan for the development of the National Cooperative Bank, which once established, will be managed by a team under the bank.

They will also seek funding for the initiative, consult with farmers, and research the country’s previous incarnation of a cooperative bank, which was seized by the Central Bank of Uganda in 1999 after 35 years of operation. 

The Central Bank cited insufficient capitalization and insolvency as the reasons for closing the bank.

The committee plans to share a  proposed way forward for the new cooperative bank with government ministers within the next three months.

It is believed that with the revitalization of the cooperative bank, cooperators will ease access to affordable and appropriate financing for cooperatives in all sectors.