The Financial Sector of Uganda
The Ugandan financial sector is relatively well developed with growth rate of 11.8% in 2012 and the sector consists of a range of formal, semiformal and informal institutions and currently the sector is improving due to the number of different regional and global financial institutions that have come to Uganda. Uganda has currently 9 foreign based and 11 indigenous commercial banks, 25 insurance companies, 1 re-insurance company, 7 credit institutions, 5 other non-banking finance institutions and 72 forex bureaux.
Legal Framework in the financial sector
Ministry of Finance planning and Economic Development
Ministry plays a pivotal role in the co-ordination of development planning; mobilisation of public resources; and ensuring effective accountability for the use of such resources for the benefit of all Ugandans.
Functions of the ministry
- In charge of collecting and budgeting for all government money.
- Formulate policies that enhance stability and accelerate economic growth and development.
- Plan and design strategies for rapid economic growth and transformation.
- Mobilize domestic and external resources.
- Ensure efficient allocation and utilisation of public funds.
- Monitor and account for the utilisation of public resources.
The Financial Institutions Act 2004
The Act regulates the operating environment in the financial industry sector. It also provides for the regulation, control and discipline of financial institutions by the Central Bank. The law covers the following among others:
- Application of the Act
- Procedures for applying for a license
- Various factors that are taken into consideration while granting a license
- Duration, processing/ granting of license, license fee and refusal of license
- Shareholding pattern of financial institution
- Various entities that is eligible to hold shares in financial institutions
- Procedures for registration for the shares
- Capital requirements
- Prohibitions and restrictions on lending against different instruments, and under certain given circumstances
- Financial reporting structure and the corporate governance of the institution;
- Duties and responsibilities, board meetings, removal of directors, audit committees and its functioning.
Micro-Finance Deposit-Taking Institutions Act (MDI) 2003
The micro-finance deposit taking institutions are regulated by Bank of Uganda under the Micro Finance Deposit-Taking Institutions Act No. 5 of 2003. The Act provides for the licensing, regulation, and supervision of microfinance deposit-taking institutions in Uganda. The Act covers the following among others:
- Licensing, capital requirements, capital adequacy requirements, minimum liquid assets, and other matters related to licensing.
- Restrictions on Certain Transactions and Dealings by Microfinance Deposit-Taking Institutions.
- Credit facilities and limits, prohibited transactions, and payment of dividends.
- Ownership and Corporate Governance: provides information on the ownership, leadership, and management of the institution, the role and duties of external auditors, and the role of the credit reference bureau.
- Supervision of Microfinance Deposit-Taking Institutions: focuses on the responsibilities, duties and powers of the Central Bank, management take-over, and powers and duties of a statutory manager.
- Receivership: discusses placing an institution under receivership and options available to a receiver.
- Liquidation: addresses the bar on liquidation, voluntary liquidation, duties of a liquidator, and liquidation by the Central Bank.
- The Insurance Act Cap 213 (1996) and Insurance Regulations (2002)
Collective Investment Schemes Act (2003)
The CMA regulates financial reporting of collective investment schemes under the Collective Investment Schemes Act (2003)
The Insurance Act Cap 213 (1996) and Insurance Regulations (2002)
This is the law that regulates the insurance sector in Uganda.
Reference Bureaus gazetted in 2005.
Additional regulations for anti-money laundering, consolidated supervision, foreign exchange business and external auditors; prompt corrective actions, mergers, acquisitions and takeovers, Internal Auditors reporting requirements, Finance Houses and Discount Houses are in the process of being implemented.
The information under the sector is organised as follows;
Financial Sector Profile Uganda
Financial institutions in Uganda
Stock markets in Uganda
Uganda Budget 2013/2014