Regulating and Strengthening Tier 4 Microfinance Institutions in Uganda

Background studies representing more than two years of investigations
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This paper discusses the regulation and supervision of Tier 4 institutions in Uganda. The paper describes Tier 4 as institutions engaged in microfinance that are not licensed by the Bank of Uganda. Tier 4 typically consists of savings and credit cooperative societies (SACCOs), member based organizations, such as Village Savings and Credit Institutions, Financial Service Associations, and rotating and accumulating savings and credit associations, various non-governmental organizations (NGOs) and community-based organizations engaged in microfinance activities.

This paper provides advice on developing a regulatory framework for Tier 4 institutions. More specifically, the paper focuses on who should regulate these institutions and how they should be regulated. The paper also addresses the importance of consumer protection and financial education within this sector.