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In Uganda, microfinance services are provided by both formal and semi-formal institutions. The main institutions are commercial banks, credit institutions, microfinance deposit-taking institutions (MDIs), savings and credit cooperative organizations (SACCOs), and non-government organizations (NGOs). In addition, there are a number of moneylenders. The Bank of Uganda regulates commercial banks, credit institutions, and MDIs. SACCOs are supervised and monitored by the Department of Co-operatives within the Ministry of Tourism, Trade, and Industry, and NGOs are monitored by the National Board of Non-Governmental Organizations housed at the Ministry of Internal Affairs. Over the past decade, a four-tier system for regulating and supervising institutions involved in microfinance has emerged in Uganda. Tier I consists of financial institutions, such as commercial banks; Tier II consists of non-bank financial institutions, such as credit institutions; Tier III consists of MDIs; and Tier IV consists of SACCOs and NGOs.



Microfinance & Banking

Consumer Protection

Although Uganda still lacks an overarching legal framework for consumer protection, the Bank of Uganda in 2011 took the significant step of issuing Guidelines for Financial Consumer Protection. These Guidelines apply to all regulated financial entities and their agents and cover disclosure, suitability, consumer recourse and other key consumer protection measures. Such action evidences regulatory initiative where the legislature has largely failed to act. Since 2004, bills for a competition law and a consumer protection law, drafted by the Ugandan Law Reform Commission, have awaited Cabinet approval and passage in Parliament. Although provider-level complaint and consumer recourse mechanisms are part of the 2011 Guidelines, there are no third-party or government dispute resolution  mechanisms for aggrieved consumers, despite the draft Consumer Protection Act's proposals for a small claims court and mediation and arbitration systems. 

More generally, Uganda has had since 1994 a deposit insurance scheme, which provides partial coverage for depositors’ losses in the event of a bank failure. The Micro Finance Deposit-Taking Institutions Act of 2003 also mandates the establishment of such a fund for certain microfinance institutions.

The Uganda Consumers’ Protection Association (UCPA) is an NGO that has among its objectives the following: to educate consumers, to defend consumer rights, to provide legal services in matters of consumer welfare, and to act as a consumer rights watchdog and lobbying organization. The Consumer Education Trust (CONSENT), an independent civil society organization founded in 2002, seeks to empower consumers, increase consumer awareness, promote ethical practices among businesses, and engage policymakers to enact pro-consumer policies. However, perhaps more effective in the financial sector has been the Association for Microfinance Institutions in Uganda (AMFIU), an umbrella organization of microfinance institutions involved with research, advocacy, information collection and dissemination, capacity building for members, and performance monitoring. In the belief that educating consumers is in the best interest of its members, it has implemented a Consumer Education and Transparency Programme, has developed a Consumer Code of Practice for its members, and has also published a Consumer Financial Education Handbook, funded by the European Union. These latter two documents can be found under "Recommended Reading".

Branchless Banking