Unlicensed SACCOs risk closure, accused of preying on savers

Members of unlicensed Savings and Credit Cooperative Societies (SACCOs) are at risk of losing their hard-earned savings, Philip Otim, the Apac District Commercial Officer, has warned.

Available figures indicate that there are at least 14,000 licensed SACCOs in the country, while over 5,000 others are unlicensed and therefore operating illegally, without the knowledge of the regulator.

Otim issued the warning while handing over the ‘Probationary Certificate of Existence’ to Abulomogo Maize Farmers’ and Credit Cooperative Society in Kidiani parish, Chegere Sub County, in Apac district on Thursday.

Abulomogo is one of ten SACCOs that were recently granted restricted licenses by the Uganda Registration Services Bureau (URSB) and the Registrar of Cooperative Societies to operate for six months ending in June this year.

Otim said that the bureau is in the process of cracking down on illegal SACCOs in order to safeguard savers from unscrupulous individuals.

“Notice is given to public and private entities that engage in any form of deposit-taking or SACCO business transactions with SACCOs that are not licensed: they are doing so at their own peril, and we will not be held accountable if the SACCOs disappear with their money,” he said.

He added that the law regulating the operation of Saccos makes it a criminal offense for any person to engage in SACCO business without a valid license from the authority.

“The has regulator cautioned such SACCOs, saying they face criminal proceedings for operating illegally and endangering members’ money. Those operating illegally face a fine of up to Shs 500, 000 or imprisonment for three years,” he added.

David Odora the Chegere Sub County male Councillor tasked SACCO leaders to ensure that their entities are quickly registered with the Registrar of Cooperatives to avoid risks. He also cautioned the public against saving and borrowing with unregistered SACCOs.

“How would you risk your money with unlicensed Saccos? Don’t throw your money in the rubbish pit by saving with some of these SACCOs that are not known by the government,” he said.

The Apac District Operation Wealth Creation Coordinator Col. Godfrey Okello appealed to Abulomogo’s members to be innovative and identify other income-generating projects to promote the progress of their SACCO.

“Save, borrow, pay, and above all think of other business ventures to develop your SACCO further,” he advised.

He also cautioned them to eschew the mismanagement of public funds and instead embrace transparency and accountability.

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Agoro Cooperative members decry delayed repair of Irrigation scheme

Members of the Agoro Self-Help Irrigation Cooperative Society have denounced the delayed rehabilitation of the Agoro Irrigation Scheme in Lawmo district, saying the delay has robbed them of the livelihood they earned from growing rice.

The 187 members of the cooperative used to depend on rice growing as their main source of earning. But last year a team from the Ministry of Water and Environment stopped rice growers from using the irrigation scheme until it has been rehabilitated.

The Scheme was last rehabilitated between 2012-2013 to a tune of Shs 27bn, but a few years after, the water pipes got damaged and parts of the canal silted.

In 2019, the government, through the Ministry of Water and Environment said it would embark on repairs to the said scheme, with the project expected to cost Shs 6bn, after it was abandoned by many farmers because of its poor state.

In March 2020, officials from the ministry delivered over 1000 water pipes to the site but, farmers say, the pipes have been lying idle at the office premises of Agoro cooperative since then.

Affected livelihoods

Teopista Atim says it has been growing rice since the year 2000. She used the proceeds from rice to buy land, build a house and educate her four children.

She said in the early 2000s, her annual earnings from growing rice ranged from Shs 10-12m from 17 acres.

“At the time, the price of rice per kilogram was still low,” she quips.

However, the last time she planted 10 acres of rice in 2019, she earned Shs 16 million.

With the deterioration of the irrigation scheme, however, her source of income has been adversely affected.

“I used to grow rice which could give me a lot of money. But my production level started going down in 2013 because the irrigation scheme was poorly rehabilitated.”

Atim says the irrigation was poorly done, such that the water channels are below the gardens, thus farmers have to set up obstructions by piling sacks of sand to have water flow into their gardens.

“They [Ministry of Water and Environment] promised to start repairing the irrigation scheme in 2020 but they are yet to show up,“ she narrates.

Unable to grow rice, as usual, she tried other crops. It would end in disaster.

“Last year, I planted 10 acres of maize, which was destroyed by floods. I only harvested 3 bags of sorghum, which I used to brew malwa,” Atim said.

Margaret Oryema, another rice farmer, says she started growing rice before the irrigation scheme was rehabilitated, and used the proceeds to pay school fees for her three children up to university level, single-handedly. She also completed constructing a house which her husband started and failed to complete.

Oryema said she used to raise between Shs 7-10m from growing rice on her 8-acre farm before the rehabilitation of the irrigation scheme went awry.

However, last year she did not plant rice and does not expect to earn much this year if repair of the scheme is not expedited.

“Last year we never planted rice. And we are not sure of this year because work on the irrigation scheme has not even started. I no longer have money in my account because rice was my main source of income,” Oryema said.

Denis Ocan, another member of the cooperative, expressed disappointment with the fact that the affected farmers have received no update on the start date of the planned repairs despite a delay of almost a year so far.

No funds

Brenda Akao, the Communications Officer in the Ministry of Water and Environment in Northern Uganda, admitted that the ministry had delivered pipes for rehabilitating the irrigation scheme, but they are awaiting some funds before the repair works can start.

“Yes, I can confirm that we delivered pipes there. But we are now waiting for funding. Our commencement of work there will depend on the availability of funds,” Akao said.

The government adopted an irrigation policy in 2018 to improve agricultural production, with one of the implementation strategies being to construct 70,000 small irrigation schemes countrywide- one for each parish.

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Lango Cooperative Union leases 11-square kilometre land to German investor

Leaders of Lango Cooperative Union have leased out a sizeable chunk of its land assets to Smax-Group, a German investor, in a five-year deal that will see the investors develop the redundant land.

The land that measures about 1,165 hectares (about 11.65 square kilometers) is located in Angayiki village, Chawente Sub County, Kwania District.

Formed in the 1950s by cotton farmers in the greater Lango sub-region, Lango Cooperative Union lost all its assets in the early 1980s to commercial banks and some unscrupulous individuals.

However, the union later reclaimed its land in Angayiki in the ongoing struggle to repossess its prime assets.

Maxwell Akora, the Lango Cooperative Union Chairperson, who doubles as Maruzi County MP, says the union has leased out the recovered Angayiki land, a move aimed at generating funds for the operationalization of its primary societies.

“The long-term lease of the land will see the investor pay 1.1 million shillings per acre to the union. I believe this will secure the land from encroachers and bring benefits to all our primary cooperatives,” he said in an interview.

“The land has not been sold, but leased out for a period of five years, to raise money to help the 144 primary societies under Lango Cooperative Union, “Akora said. He said the move will generate Shs 1.3 bn in seed capital for farmers, to be recycled every season to run the union’s activities.

He noted that while the union had received Shs 2 bn from the government out of the Shs 17 bn owed to it in compensation for losses made during the 1981-1986 guerrilla war that brought the NRM/A into power, that money alone is not sufficient to run the union’s activities.

According to Akora, the German Investor will develop infrastructure, set up irrigation systems, process and distribute quality seeds to farmers and later buy from them at good prices for export.

“After the lease period elapses, the assets built by the investor will remain in the possession of the Union,” he said.

The Union Chairperson further revealed that according to an MoU signed with the union, the German investor will build a technical school for training farmers, and 15% of profit gained by the investor will be shared by Lango Cooperative Union.

“They have already surveyed the land; they will rent the land for growing soya beans and cereals like maize, beans and support farmers in all the 144 primary societies.”

Tom Neo, one of the prominent farmers in the district and a member of Alira Primary Society commented, “The Union leadership needs to be transparent and accountable. Leasing out the land to an investor is a good move only if they can be transparent about it to members.”

Another farmer, Brenda Akidi of Aninolal Primary Cooperative Society, welcomed with excitement the move to lease out the land to an investor, saying it will not only save the land from encroachers but also provide jobs to farmers.

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SACCOs grappling with fraud, poor governance

A significant number of Savings and Credit Cooperative Organizations (SACCOs) in Uganda have suffered fraud and poor governance, a new report indicates.

The report was released by the Project for Financial Inclusion in Rural Areas (PROFIRA), an organization that monitors the performance of different SACCOS in Uganda.

A study by the organization found that 64 out of 453 SACCOs supported under the program had collapsed, while 312 are grappling with fraud and poor governance issues, among other challenges.

Collins Agaba, PROFIRA’s Program Manager, says that only 77 of the SACCOS supported by PROFIRA had no issues.

“141 have at least one problem, and the rest have suffered more than three problems,” he noted, adding:

“We found that the main challenges facing SACCOs include defaulting on payment of loans by members, low volume of business and poor financial practices.”

Agaba explained that whereas cooperatives are managed by elected committees, the leaders chosen often lack the knowledge required to manage them.

“They then end up depending on untrustworthy staff who embezzle members’ deposits.”

In response, he revealed, PROFIRA has embarked on empowering members of different SACCOs with the requisite financial skills.

Robert Odur, the Chairperson Board of Directors of Ikwera SACCO, agreed with the report’s findings.

He cited the case of Ikwera SACCO which was established in 2009 which has had its portfolio drop from over Shs 170m two years ago,to less than Shs 50m currently.

“169 million shillings was loaned out by Ikwera Savings and Credit Cooperative Society Limited in the financial year 2018/2019, but in the last financial year, we only gave out 42 million shillings as loans. Our clients are not able to repay the money in time and loan recovery is a challenge,” he said in an interview.

Kwania District Commercial Officer, Patrick Bura expressed concern about the rate at which SACCOs in the district are collapsing, saying it could lead to an increase in poverty rates among the population if not urgently dealt with.

” There is an urgent need to rejuvenate the failed SACCOs and equip the SACCO leaders with management skills or else many people will suffer and even lose their assets in search of the financial services that SACCOs are meant to offer.”

Joyce Acio, a resident of Aduku town council notes, people are likely to run to money lenders whom she says are worse than banks given their exorbitant interest rates.

She argues that having SACCO members manage them introduces a conflict of interest, thereby negatively impacting their performance.

“When the SACCO staff are also members, they start taking loans and bringing them back without interest because no one is supervising them,” she said.

Acio advises all Saccos to establish Internal Audit Committees whose task should be to regularly audit the financial institutions to avoid embezzlement.

She also called on District Commercial Officers to ensure capacity building for the SACCO leaders as one measure to minimize the chances of their collapse.

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400 farmers in Kwania receive heifers under restocking program

More than 400 farmers from six sub-counties in Kwania district have received heifers worth Shs 576m under the restocking program.

In 2014, the government earmarked Shs 20 bn to restore livelihoods and alleviate poverty in West Nile, Acholi, Lango and the Teso-sub regions through restocking under the Peace, Recovery and Development Plan (PRDP) following the two-decades-long rebellion by the Lord’s Resistance Army (LRA).

The heifers will benefit widows, widowers, the elderly, persons with disabilities, orphans and the Ex-combatants from the Sub Counties of Aduku, Inomo, Chawente, Nambieso, Abongomola and Aduku Town Council.

Bazil Okello Onac, the Kwania District LCV Chairperson asked the beneficiaries to adhere to the restocking guidelines issued by the government and use the animals to alleviate poverty at the grassroots.

“They should keep these animals for at least four years, according to the government guidelines, and let them multiply in order to eradicate poverty. We want to hear success stories on what the restocking program has done for them,” he said.

In a similar vein, Salim Komakech, the Kwania Resident District Commissioner cautioned the beneficiaries against selling off the animals, but rather urged them to use them to improve their income.

“The president’s vision is to empower households that are not yet in the money-making economy. Beneficiaries should not sell off these animals, but instead use them for production. We as security shall ensure that these guidelines are indeed followed,” he said in an interview.

Bonny Okello, a resident of Ikwera cell in Aduku Town Council and beneficiary of the program, thanked the government for the donation, saying the animals will go a long way to improve on his livelihood.

Another beneficiary, a widow and resident of Anginyi Village in Aduku Sub County, Shopia Odul, says this is the first time she has personally benefitted from the government.

“I am going to look after the animal well and once it multiplies, I will use the income to pay for my four children school and provide us a better life,” she pledged.

Dr Charles Opeto, the Kwania District Veterinary Officer said that Aduku Town Council was slated to receive 26 herds of cattle, Aduku 65, Nambieso 130, Inomo 95, while Abongomola and Chawente would each get 82.

The restocking program has faced a host of challenges since its inception, including inadequate supervision and alleged ghost beneficiaries.

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UCDA cracks down on immature coffee trade

The Uganda Coffee Development Authority (UCDA) has declared war against traders engaged in buying immature coffee from farmers.

UCDA’s regional extension officer for Rwenzori region, Emmanuel Tumwizere, said picking immature coffee berries affects the quality of coffee in the country.

“Coffee is continuously losing quality because of some farmers harvesting immature coffee which ends up rotting. Others use poor post harvest handling methods like drying it on the bare ground, which also negatively impacts on its quality,” he said.

Even consumers are put at risk by immature coffee, which Tumwizere says can become “hazardous”.

“When farmers pick immature coffee, they first keep it in sacks and hence it ends up molding. This develops a toxic acid which is hazardous to consumers because it causes cancer,” he said.

He further noted that such poor harvesting practices threaten to undermine the progress that has been made in promoting coffee farming in the region.

“People in the Rwenzori region have responded positively to planting more coffee but there are some farmers who are not adhering to good harvesting standards by harvesting immature coffee,” he said.

Traders involved in buying immature coffee tend to lure farmers into selling to them by offering more money for it than they would pay at harvest time when mature coffee floods the market.

According to locals, traders buy a basin of immature coffee at Shs 10,000, which Tumwizere said is more than what they would get for coffee that is ready for harvest.

In response, UCDA has intensified efforts to curb the vice by threatening to arrest farmers involved in the trade.

“We shall start arresting any farmer that we find harvesting immature coffee because it affects the quality of coffee on the market which not only affects the farmer but also the country’s exports” he said.

Taking action

On Wednesday this week, Tumwizere impounded 26 sacks of immature coffee and arrested two workers accused of engaging in the illicit trade at a coffee store in Kiburara village, Hakibale Sub County, in Kabarole district.

The operation, which was conducted by Tumwizere and an official from the Operation Wealth Creation (OWC), followed a tip off from locals that some traders were buying immature coffee within their village. The traders were apprehended and handed over to the police, and their coffee impounded.

In 2017, during an operation OWC officials impounded more than 500kgs of green coffee berries from traders in Mitandi Kyamukube town council, now part of Bunyangabu district and arrested one of the traders.

Richard Waako, the in-charge, defence, in Kiburara village where the culprits were netted, said the two individuals had been arrested twice before over the same practice (dealing in immature coffee), but they have persisted in the illicit trade.

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