Kampala, Uganda | GODFREY SSALI | President Yoweri Museveni has cautioned members of Savings and Credit Cooperative Societies (SACCOs) on the habit of non repayment of loans saying it is the reason why many SACCOs and credit institutions have collapsed. This was contained in his speech read by the State Minister for Cooperatives Frederick Ngobi Gume during the 10th Anniversary celebrations for Butuuro peoples SACCO in Bushenyi district last weekend.
The President noted that repayment of loans is one of the three important pillars in the management and operation of SACCOs in addition to savings and access to credit. He said here are people in Uganda’s society who enjoy borrowing but never pay attention when it comes to paying back and this has resulted in the failure of many SACCOs and credit institutions.
He added that without honesty, SACCOs cannot achieve the aim for which they are started because honesty is what builds people’s confidence and morale to belong and form SACCOs.
He commended the founders and the shareholders of Buturo Peoples SACCO for the progress made in the last 10 years and for responding by enrolling and agreed to pool savings together to advance the spirit of co-operation in development. He said it is such a spirit that has enabled the SACCO’s assets to grow to a tune of shs.3.2 billion a space of 10 years.
Buturo Peoples’ SACCO was founded in 2007 with only 46 members but currently has a membership to 5,756 people and is ranked as one of the best performing SACCOs in Uganda by Bank of Uganda. The SACCO has a loan portfolio of shs.2.47 billion, share capital of shs.817 million and employs 22 people. They offer a number of services including savings and credit services, through which members have acquired agricultural loans, commercial loans, solar lighting loans, water harvesting loans, salary loans, school fessloans and many others.
The SACCO also offers social services, a medical insurance scheme, and has built a medical centre where members and the rest of the community get medical treatment at an affordable cost.
The Chairperson of the board Bob Richard Tibasiimwa told the Minister that in the past 10 years, they have managed to construct new premises, open a medical center and open a branch in Kanshenshero.
Tibasiimwa says they however, still have some challenges mainly taxation, loan defaults by members, low savings, the high cost of credit and poor saving culture among the members among others.
“We need government intervention on the levies on incomes from savings, salaries and profits which are still high and discourage savings and growth”, exclaimed Tibasiimwa.
He said their target is to Increase lending to more communities covering the whole greater Bushenyi region by increasing membership to over 35,000 in the next five years.
Minister Gume applauded Buturo SACCO for the hard work, commitment and positive attitude which has guaranteed the survival of the SACCO and immunized it against the storms common to SACCO management.
“You will realize that there are many SACCOs that are started with a lot of enthusiasm but unfortunately never realize even their first anniversaries. I applaud you upon making it this far”, said Gume.
He urged the shareholders to take advantage of the wealth creation program to step up household incomes and to appreciate the value of saving part of their incomes for investment in productive ventures as opposed to the culture of consuming every penny without considering what will happen in future.
SACCOs form the biggest number of cooperative societies in Uganda. Currently there are more than 7,000 registered SACCOs.