Archive for category: Microfinance Institutions

Microfinance Institutions In Trouble In Kwania

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KWANIA –In Kwania and Apac Northern districts Savings and Credit Co-operative Societies (SACCOs) have become the preferred go-to lenders threatening to lock out microfinance institutions.

The SACCOs are drawing in huge numbers of civil servants who ordinarily are clients of microfinance institutions.

SACCO leaders in the two districts have agreed to bolster the inter-SACCO lending market by lending and borrowing money from each other – thereby locking out microfinance institutions whose loans are considered ‘expensive.’

Under the new arrangement, 11-SACCOs in the two districts will run their own inter-SACCO market. They will be able to lend and borrow from each other at reasonable interest rates to offset their dire financial positions.

Their proposed working arrangement has been forwarded to the Ministry of Trade, Industry and Cooperatives for legal advice.

Robert Odur, the Chairman Board of Directors of Ikwera SACCO in Kwania district, said the latest move is bound to put an end to the exploitative commercial relationship between civil servants and microfinance institutions, which is costly to many borrowers.

According to Odur, many civil servants are shunning the expensive microfinance loans.

“We want to create a forum through which SACCOs can interact. For example, if SACCO ‘A’ has a cash flow problem it should be able to access funding from SACCO ‘B’. It just allows SACCOs to team up and develop their capacity to serve their members. The current situation is that if your SACCO runs short of money the only place you can go to is the nearby SACCO to save civil servants from microfinance lending institutions,” Odur said in a recent interview.

Bazil Odongo, a livestock dealer and resident of Ololango Village in Apac district, said he borrowed Shs 25 million in October last year at an 8% interest rate from Acanpekun Credit and Cooperative Society in the district. Odongo said he has serviced the loan well and is making a lot of profit.

“Shs 25 million that I used to borrow from Platinum (microfinance) at an interest rate of 10% could earn me a profit of Shs 5 million, but when I opted to borrow the same amount from the SACCO, I started realizing a profit of Shs 10 million. That is why I am expanding my livestock business,” he said.

William Odoc, a teacher at Acungi primary school in Kwania district, said many teachers are turning to SACCOs.

https://thecooperator.news/budget-kwania-cooperatives-get-shs-89m/

He said microfinance institutions make unnecessary deductions on teachers’ salaries even after loans are repaid.

“It is better to acquire loans from SACCOs, it’s easy to access and repay unlike the microfinance lending institutions that are fond of making unnecessary deductions and chasing after defaulting customers,” he noted.

But Patrick Okullo, the manager Platinum Apac branch, dismissed as false claims that microfinance institutions make unnecessary deductions and chase after debtors. “In the financial year 2018/2020 our loan portfolio was at the tune of Shs 300 million, however, in the financial year 2019/2020 we realized a drop of up to Shs 180m, this is partly attributed to the Covid-19 pandemic. Although to some extent we think the coming up of SACCOs is equally doing us more harm,” he said.

Apac District Local Government currently has a total of six fully registered SACCOs with 1,512 Village Saving Lending Associations, (VSLA) and three Microfinance institutions that include; Brac, Platinum and, Bayport operating in the two districts of Apac and Kwania, with over 15,000 clients.

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The post Microfinance Institutions In Trouble In Kwania appeared first on The Cooperator News.

SACCO Leaders Shun Management Training

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HOIMA – Last week Hoima City and the district leadership scheduled two weeks of training sessions in financial literacy for all SACCO leaders that lack basic money management knowledge but surprisingly they were shunned by many.

Speaking to theCooperator Joy Kabatalya, the Emyooga focal person, said the training sessions were meant to equip SACCO leaders with financial management skills and help them understand the concept of the Presidential Initiative On Job And Wealth Creation (Emyooga).

She said city and district leaders also wanted to equip SACCO leaders with knowledge and skills in SACCO management to ensure sustainability and avoid misappropriation of funds.

According to her, the trainings are conducted at the respective sub county/division headquarters but unfortunately many have shunned the sessions.

She said only 30 out of 72 SACCO leaders turned up.

Kabatalya warned that members who shun financial literacy training will not access funds since the training is a mandatory condition for accessing the funds.

“We were training them as one way of preparing them before accessing this money to understand the do’s and don’ts of this initiative, to avoid what is happening in other districts where SACCPO leaders are embezzling the money but most of the leaders have decided to shun the training,” she said.

She also decried the poor saving culture among SACCO members yet they must save at least 30 percent of the money they apply for to be eligible for the Emyooga loans.

Kabatalya said the condition is forcing some SACCO members to withdraw their membership, which is detrimental to the future of SACCOs.

In the same week Hoima district and city authorities led by Samuel Kisembo Hoima, the Resident City Commissioner, released 62 SACCO certificates out of 72, which were formed from1,460 Emyooga associations.

https://thecooperator.news/anger-in-hoima-as-leaders-cling-on-to-emyooga-cash/

However, after handing over the certificates, the SACCO leaders were told they will not access the money until they get financial literacy empowerment. Hoima district and city received Shs 2.24 billion to be disbursed to 72 SACCOs.

John Tumusiime, the Hoima District Commercial Officer, said financial literacy training is mandatory because it will help beneficiaries to ensure that Emyooga cash, which is meant to be a revolving fund, is used sustainably.

“You need to put in place measures to ensure that the systems and structures of the SACCOs and associations are strengthened. For example, you need to have proper records, offices, which are independent from individual members’ businesses, and staff with basic qualifications,” he advised.

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The post SACCO Leaders Shun Management Training appeared first on The Cooperator News.

Microfinance Institutions In Trouble In Kwania

SACCO Leaders Shun Management Training

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