Kamwenge, Uganda | THE INDEPENDENT | The collapse of 13 Savings and Credit Cooperative Organizations –Saccos in Kamwenge and Kitagwenda has raised fears among district authorities over the future of Saccos there.
According to Kamwenge District Status report for the 2018/2019 financial year, 13 Saccos have collapsed in the last ten years. They are Businge Saaco, Ihunga Sacco, Shores of Lake George Saaco, Kiziba Sacco, Kabuye Sacco, Kamwenge Volunteers Sacco, Kabambiro Sacco, Kamwenge Lay Catholic Development Sacco, Busiriba United Sacco, Biguli-bwiza Sacco, Bisozi Sacco, East Rwenzori Diocese Sacco, Kamwenge Workers Sacco.
Gillian Twesigye, the Kamwenge District Commercial Officer, notes that while compiling the report, they discovered that poverty and incompetent leaders were among the major causes for the collapse of the Saccos. On poverty, she notes that most Saccos require the members to have saved a lot of money before accessing loans, which has seen many, quit and discouraged others.
Twesigye also elaborates that these cooperatives are managed by committees that are only voted during general meetings. She says the elected leaders normally lack the knowledge of managing Saccos and depend on untrustworthy staff who embezzle member’s deposits.
The Commercial officer is worried that with the rate at, which the Saccos are collapsing, many people may remain poor in the district if no solution is found to keep the Saccos alive. Irene Murungi, a resident of Kamwenge town notes that with the Saccos collapsing, people are likely to run to money lenders whom she, says are worse than banks because they over charge interest on loans.
According to Kasemire, there is urgent need to rejuvenate the failed Saccos or else many people will suffer and even lose their assets in search of financial services that they are meant to offer.
James Barugahare, also a resident in the town, agrees with Kasemire, saying the commercial officer should ensure capacity building for the Sacco leaders as a way of minimizing on chances of their collapse.
Efforts to speak to some of the members of the affected Saccos have been futile as they have since disintegrated without a trace. However, Agnes Kasemire, the Cashier of Kamwenge Zibumbe Sacco, which had collapsed in 2017 but resumed operations, says the cooperatives can only be sustained if all board members and staff are not members.
She explains that when the Sacco workers are at the same time members, they start taking loans and bringing them back without interest because no one is supervising them. She advises all Saccos to establish Internal Audit Committees whose task should be to regularly audit the financial institutions to avoid embezzlement.
The Kamwenge District LC V chairman, Aggrey Natuhamya, calls upon the Ministries of Planning, Finance and Economic Development and Trade Industry and Cooperatives to expedite the process of Strengthening Saccos through the Project for Financial Inclusion in Rural Areas- PROFIRA.