In many countries, SACCOs are recognized as veritable tools for poverty alleviation and economic development because they enhance individual savings and access to investment credit. In cognizance of this, countries paid a great endeavor to create a sound operating SACCO sector and to attain its sustainable development through providing effective and enabling regulatory framework. Particularly, designing special legislation and proper supervision boosts SACCOs’ growth and increase their role in poverty alleviation and socio-economic development of a country. In this study, Ethiopian SACCOs’ substantive and institutional regulatory regimes, along with their limitations, are analyzed in order to examine the adequacy of the existing Ethiopian regulatory framework in the effective regulation of SACCOs and based on the finding to suggest possible adjustment to enhance the regulation. The thesis also juxtaposes the best regulatory experiences of comparative jurisdictions on how they tried to regulate SACCOs for the purpose of drawing lessons for Ethiopia. To that end, the research adopts qualitative legal research methods. As a result, the current Ethiopian primary and secondary legislations and supervisory institution of SACCOs and regulatory experience of selected jurisdictions are consulted. The researcher also had interviews with personnel at FCA and Awach SACCO. Therefore, the whole issues related to the central theme of this study are discussed briefly and presented in five chapters. The findings of the study showed that currently SACCOs are not governed by the legal framework specifically designed for them and their regulator also is not appropriate and capable to supervise the operations of SACCOs involves financial intermediation. Consequently, different problems and issues that affect the operation of SACCOs are evident in practice. Based on this, the thesis argued that the current Ethiopian regulatory framework is not adequate to effectively regulate SACCOs and hence the country required to undertake reforms thereon. Finally, the research recommends that Ethiopia should enact new SACCOs’ specific legislation that recognizes the unique nature of SACCOs as a financial institution and strength their regulation through establishing a separate and independent regulatory authority with sufficient knowledge of the area of regulation in order to foster the sustainable development of the SACCOs’ sector.