Bank of Uganda has woken up from a long sleep on the scholarly street of textbooks, and now it wants to come and regulate the SACCOs and the registered lending companies. Wonderful. A leopard that has started telling its cubs how they smell like goats.
Let us call this thing by its real name. This is not regulation. This is a wonderful, deceitful act from the devil's department of the Lord in the ring. You sleep for years, you ignore the jungle, then you wake up and say the people who have been feeding the jungle are smelling like goats.
BOU is either sleeping on the colonial 1928 banking textbooks, or its legs can no longer handle the gang in the jungle. Because the jungle has moved. The grassroots have moved. The SACCOs have moved. Letshego has moved.
I have dealt with Letshego for 20 years. I started at 20 million in 2004 with my logbook. Just a logbook and a dream. Today, they have grown me to 500 million. You ask for a loan, and in 3 days, you have it. Three days. Not three months of papers, not three committees, not three suits asking you for your grandfather's birth certificate.
Letshego is down with the needs of the grassroots. They have grown from a barracks of forcing people to pay back to a solution that allows them to pay back. They give you a loan with fair terms, with 2 to 3 months of grace to utilise the loan and then pay back. That grace is life. That grace is wisdom. That grace is what a real lender does when he understands business. You plant first, then you harvest. You do not harvest a seed the day you plant it.
I have grown wings with these guys in my business because of that. The taxes I have paid, the jobs I have created, and the value addition to the local market are immense, using Letshego facilities. That is not theory. That is my sweat. That is my shop. That is my workers feeding their families.
If I knew the owners of this group, I would tell them this is what we need as a nation for the SMEs. This is the model. Not the bank that hides behind air conditioning and suits.
And now BOU wants to come and say the SACCOs are smelling like goats? Seriously, do we have economists? Do we have investment bankers? Or are we equipped with harvesting arms and not planting arms?
Let us look at the world, because Uganda is not the first country to face this.
In Bangladesh, Grameen Bank started with small loans to poor women. The big banks laughed. They said these people would not pay. Today, Grameen is a world model. It created millions of businesses. The central bank there learned to support, not to strangle.
In Kenya, SACCOs are the backbone. Mwalimu SACCO, Stima SACCO, Harambee SACCO. They lend to teachers, to workers, to boda riders, to mama mbogas. The Central Bank of Kenya did not kill them. It created a SACCO regulator that partners with them. Today, Kenyan SACCOs hold billions of shillings, and they fund houses, schools, matatus, and farms. The government milks tax from all that growth.
In Germany, the cooperative banks, the Volksbanken and Raiffeisen, started as village SACCOs 200 years ago. Today, they are stronger than many big banks. Germany did not call them goats. Germany called them the engine.
In America, credit unions are SACCOs with a suit. They are regulated lightly, they lend fast, and they serve the common man. The Federal Reserve does not chase them like criminals. It lets them grow the economy.
In India, microfinance took a village woman from 5,000 rupees to a shop, to a tailoring business, to employing 5 people. The Reserve Bank of India learned the hard way. When you overregulate microlenders, the poor go back to loan sharks. When you support them, the economy explodes.
That is the lesson BOU has refused to read because it is still reading from ancient colonial 1928 banking textbooks.
Here is the truth BOU does not want to hear. BOU can benefit MORE from SACCOs than from regulating them to death.
How? Listen carefully.
When a SACCO or Letshego gives a borrower money, that borrower does not eat the money. He invests it. He buys a boda. He stocks a shop. He buys maize to mill. He buys iron sheets to build rentals. He buys a fridge for cold drinks. That investment becomes a product. That product becomes a sale. That sale becomes profit. That profit becomes a salary for a worker. That worker pays rent, buys food, and pays school fees. The shop pays a trading licence. The boda pays a permit. The business pays VAT. The worker pays PAYE. The bank gets deposits. The country gets forex because local products replace imports.
That is the milk. That is the real milk. BOU wants to milk the cow by cutting its neck. A wise farmer milks the cow by feeding it.
Give all the PDM money to Letshego and SACCOs. I say it with my full chest. Give it to the people who know the grassroots. Give it to the people who give in 3 days, not 3 months. Give it to the people who give grace, not pressure. BOU will milk more than regulation. BOU will milk taxes, BOU will milk jobs, BOU will milk stability, BOU will milk financial inclusion, BOU will milk a Uganda that actually works.
Regulation that kills lending is not regulation. It is harvesting arms without planting arms. It is a leopard that eats its own cubs and then complains that the jungle is empty.
Young man, old man, businesswoman, listen. Keep your ledger. Keep your SACCO. Keep your Letshego. Work hard. Push work. Work makes the wallet smile in the morning, afternoon, and evening. Do not expect to pick gold, diamond, or ivory at the roadside. You can only pick them from heaven, and you know how to reach heaven. Through sweat. Through investment. Through a lender who understands you.
And BOU, if you are listening, come down from the textbook mountain. Come to the jungle. Come and learn from the people who have been feeding this nation while you were sleeping. Do not regulate the SACCOs to death. Partner with them. Feed them. Protect them. And you will harvest more than you ever dreamed.
The Oracle of Kifuuta, Katooke, Kyotera, Buddu, has seen it all.
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