Egangakinosbonik SACCO struggles to recover UGX 28m

Egangakinosbonik saving and credit cooperative society (SACCO) in Katakwi district is struggling to recover millions of shillings from its members.

Investigations by the office of the district commercial officer and microfinance support Center reveals that by October 17th, 2018, the Sacco’s outstanding loan was shillings 28m.

The loan represents 45 percent of the principal capital of 8 m paid by the members as shares over the last seven years. This came to limelight during a recent interview The Cooperator had with the district commercial officer Patrick Todi.

Todi told this website that during an engagement between the Sacco members and officials from the microfinance support center, it was discovered that the manner in which the management is running the Sacco is not transparent.

Among other issues discovered is some members were taking money through unlawful means with the help of the board committee without involving the loans committee and the manager’, said Todi.

Geoffrey Omolo, the Sacco manager told The Cooperator that efforts by the management to recover the money have proved futile as some members are on run while others have deliberately refused to pay the loan despite several reminders.

He added that some people had put money in the name of shares expecting to withdraw later and yet they didn’t understand the difference between shares and savings.

‘By the time I tried to recover the loan, many people would tell you that recover my loan from the shares and yet by law shares are not supposed to be withdrawn or used for paying the loan’ stated Omolo.

According to Omolo, failure by defaulters to pay back the loan has put the Sacco on the verge of collapsing as many members have withdrawn from the Sacco while others have stopped paying either savings or shares.

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Ugandan SACCO learns from the success of Mwalimu National Sacco -Africa’s leading cooperative

They are the top Cooperative SACCO in the continent, but this mark made by the Mwalimu Savings & Credit Cooperative Society Limited, also known as the Mwalimu National Sacco Limited, came with a huge price.’

According to Mr. Alphonse M Kaio (CPA), the Chief Executive, the price included professionalism, integrity, honesty, commitment to excellence and accountability.

Today, the Mwalimu Sacco, with a membership of 87,000 with over 40 branches spread across Kenya, are listed as the best performing cooperatives both in the region and entire continent -Africa.

The team of 12 trip members comprised of Board members and Management of the SACCO

The Cooperatives that participated will receive one-week leaders’ orientation starting with the 5 Coops Board members and Manager by the Skill Coop.

Kaio who met the Uhuru Institute Plant-A-CoopTree campaign winners, the Munaku Kaama Cooperatives Savings and Credit Scheme said patience, hard-work, and transparency are other aspects needed for prosperity. The team was visiting the Mwalimu SACCO top bosses at their Mwalimu Towers located at Upper Hill, Hill Lane, Off Mara Road in Nairobi as part of their four-day study tour to Kenya.

The nationwide campaign to plant trees was initiated by The Uhuru Institute for Social Development to among others address the abject poverty, and to help cooperatives commercialize the tree planting business.

The team of 12 included: Mr. Makumbi T. Jude, the Chairman Board, Mr. Lutaaya Lawrence, the SUPCO Chairman, Mr. Kabuye James, Treasurer, M/s Nakimuli Jacqueline, Secretary, M/s Nansalire Sarah, Manager, Mr. Mukopi Dominic, Board Member, Gwokyalya Elizabeth, Board Member, Mr. Mukasa Simon, Board Member, M/s. Nassolo Harriet, Accountant, Mr. Bagonza Boniface, Field Officer, Rev. Fr Mpoza Bernard, Member, and Mr. Lubega Ronald, member.

The team was accompanied to Nairobi by senior staff of the Uhuru Institute for Social Development led by the Chief Executive, Mr. Leonard Okello. Others were Mr. Denis Tukahikayo Ph.D. Technical Advisor, Mr. Sean Budeyo, the IT Manager, and Mr. Francis Lulahali, the Data Management Officer.

A registered cooperative from each of the mentioned districts was selected to compete in a national wide competition where the selected cooperatives were each given 500 grevillea tree seedlings after availing at least an acre of land. The growth and progress of the trees were closely monitored on a quarterly basis for a period of a year to determine the outstanding cooperatives.

The Mwalimu Chief Executive explained to the visiting team that Mwalimu Cooperative Savings & Credit Society Limited, also known as Mwalimu National Sacco Limited, but often referred to as Mwalimu Sacco, is a savings and credit co-operative society (Sacco) in Kenya, the largest economy in the East African Community.

“Mwalimu is an institutional Sacco, composed of the staff of the Teachers Service Commission (TSC), the TSC teachers in secondary and tertiary institutions, the TSC teachers in elementary schools, the staff of Mwalimu National Sacco Limited as well as the spouses of the above members, when formally, gainfully employed,” said Kaio.

He said the society is licensed and regulated by the Kenyan Government formed the body, the Sacco Societies Regulatory Authority (SASRA). “As of September 2018, Mwalimu Sacco asset base valued at KES 58 billion (USD$565 million).

CPA, Alphonse M. Kaio said determination and being focused was the reason for their achievements to date. He said SACCOs that are fueled by politics can’t thrive. “Our mission is to be a World Class Co-operative Financial Institution by mobilizing savings from our members and providing financial services to our customers at competitive rates,” said Mr. Kaio.

Mwalimu National SACCOs other top brass in attendance included; Elizabeth A. Okinyo, Head of Marketing, Research & Corporate, Mr. Ounza Jairus, the Head of BOSA/ Business Loans as well as the Head of ICT.

Kaio said, “The 87,000 members comprise of Class A members, who are drawn from the TSC Secretariat as well from the TSC teachers in secondary schools and Tertiary institutions spread across Kenya. “Our members are teachers with academic qualifications at the level of Diploma and above who are employed in education-related institutions,” he said.

Their deposits as of September was Kshs32 billion (USD$ 320 million) with an additional Kshs29 billion (USD$ 290 million) lent out as loans to members.

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Boda Boda Cooperative Urged to include Spouses

By Patrick Jaramogi

Members of Kampala Civic Centre Boda Boda Transporters Cooperative Society (KCCBT) have been urged to expand their bond of association, to include wives of the cyclists.

While speaking at the 2nd Annual General Meeting (AGM) of the cooperative, Mr. Leonard Okello, the CEO of The Uhuru Institute for Social Development expressed concern regarding the gender composition of KCCBT. KCCBT, a cooperative for boda boda cyclists has 108 members but only 2 are women.

“Copy from Mwalimu National in Kenya. Much as the rule is that members (teachers) must be degree holders, their spouses are free to join as members. Cooperatives is all about numbers”.

Mwalimu National is a SACCO for teachers in Kenya. It is the largest African SACCO, with over 87,000 members and savings of over Ush. 1.148 trillion.

Mr. Okello said The Uhuru Institute is prepared to start the Soko Credit to benefit women in small scale business. “If your wives were members of KCCBT they would be the first to benefit from the Soko Credit that we are launching soon,” he said. Soko Credit is a loan facility for small scale businesses.

Mr. Okello further urged the boda boda cooperative to emulate Kenya’s Mwalimu and Yetu SACCOs for prosperity.

Mwalimu has 75% stake in two leading Kenyan Banks and similar stake in an insurance company, while the Yetu SACCO in Meru has a tea factory as well as a university.

“You can even do much better than them once organized and united,” he said.

He added: “Once you fight within yourselves you derail yourselves. Once organized, you can be so great.”

Mr. Kaseesa Abdallah, the Chairman of KCCBT urged the boda boda riders to be active and support KCCBT to grow. He said they now have 108 members with savings to the tune of Ushs. 63,291,500.

“We began the Piki-Credit in April 2017, while the oil project started in June 2017,” he said. He urged the members to only purchase oil for their motorcycles from the KCCBT offices.

KCCBT is supported by the Freedom Fund, through the Piki-Credit facility. Piki-Credit is an enterprise of The Uhuru Institute, which provides flexible motorcycle loans to cooperatives. The loan is repayable in approximately 16 months only. During the AGM, 28 motorcycles where disbursed to members of KCCBT.

The boda-boda business in Kampala is lucrative. The influx of people in the city and the resultant heavy traffic has posed a challenge in transportation. People spend hours trapped in endless traffic, arriving late at their destinations. Boda-bodas motorcycles provide an efficient solution to the transport crisis because of their ability to navigate easily through traffic and access remote areas. The sector employs close to 2 million people, approximately 8% of Uganda’s population.

The AGM was held on 21 October 2018.

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The Uhuru Institute Plant-A-CoopTree campaign award winners, Munaku Kama SACCO Ltd leave for study tour in Kenya

By Patrick Jaramogi

What began as a launch in March 2017, is now yielding fruits. The first batch of the winners of the Uhuru Institute supported nationwide campaign to get cooperatives to plant trees have left for Nairobi, in Kenya.

The nationwide campaign to plant trees was initiated by the Uhuru Institute for Social Development to among others address the abject poverty, and to help cooperatives commercialize the tree planting business. Dubbed “Plant-a-CoopTree’, that was launched in Ngogwe sub county in Buikwe district, the campaign has now spread across the entire country.

Mrs. Jane Amuge Okello, the Director of Operations at the Uhuru Institute said the campaign is aimed at promoting commercial tree planting as a viable strategy for wealth creation and also providing an opportunity for diversifying cooperative businesses.

The inaugural winner for this tree planting campaign was Munaku Kama SACCO Ltd, a local Cooperative based in Kisubi, Wakiso district, in Uganda. The team of 12 members left Kampala on 14 October 2018, for a study tour in Kenya. They were accompanied to the field study by a team of staff from the Uhuru Institute of Social Development, led by the Chief Executive Mr. Okello Leonard.

While in Nairobi, the Munaku Kama team will visit one of the biggest SACCOs in the continent, the Walimu SACCO before heading to Meru to visit Yetu SACCO Ltd, to learn business innovations and environment conservation business. The team will also visit a housing cooperative in Nairobi among other sites.

Speaking to theCooperator before departure, the Munaku Kama team leader Nansalire Sarah said; “This trip is so fantastic, we have been waiting eagerly for this moment and we are optimistic we shall learn a lot from this trip.”

“The campaign, apart from acting as a benchmark for environmental conservation, will also help the population to appreciate that with the growing demand for timber, it can be a great avenue to make huge cash,” said Mr. Okello.

The tree planting competition covered 20 districts including: Nebbi, Kitgum, Buikwe, Arua, Wakiso, Kampala, Masaka Soroti, Hoima, Kiryandongo, Ibanda, Mbale, Kaliro, Bukwo, Kasese, Kabarole, Amolatar, Kabong and Tororo.

A registered cooperative from each of the mentioned districts was selected to compete in a national wide competition where the selected cooperatives were each given 500 grevillea tree seedlings after availing at least an acre of land. The growth and progress of the trees were closely monitored on a quarterly basis for a period of a year to determine the outstanding cooperatives.

The best five cooperatives out of the 20 were then selected and were awarded different prizes at the just concluded International Cooperatives Day that was held at the Civil College in Jinja. Finance Minister, Mr. Matia Kasaijja who represented the President at the event handed over the awards to the winners. The top winners Munaku Kaama SACCO won an all-expenses paid learning visit to Kenya.

Mr. Leonard Okello paid special tribute to the Government of Uganda, Ministry of Trade Industry and Cooperatives, the National Forest Authority (NFA) with whom TUI has signed MoU which have made the tree planting competition a success.

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New UCSCU Chair to Lobby for Harmonisation of SACCO Regulations

By Nancy Akullo

Newly elected Board Chairperson of the Uganda Cooperative Savings and Credit Union (UCSCU), Hon. Bintu Jalia Lukumu has pledged to continue lobbying for favourable policies and regulations for Savings and Credit Cooperatives (SACCOs).

Elections for new Board members were held during the Annual General Meeting (AGM) in September 2018. Hon. Bintu, who is also the Chairperson of the Parliamentarians SACCO is the District Woman Member of Parliament (MP) for Masindi.

Mr. Sylivester Ndiroramukama, the CEO of UCSCU said, “Hon. Bintu has been very influential in lobbying for SACCO policies. She was supportive of the 10-year Income Tax exemption.”

Among the regulatory issues of contention for SACCOs, Hon. Bintu cites the dual regulation by the Tier 4 Microfinance Institutions and Money Lenders Act (2016) as well as the Cooperative Societies Act Cap. 112.

“You cannot ask me to operate under 2 environments. If I abrogate this one, then the other one will strike me,” she said.

She cited a clause which mandates SACCOs with voluntary savings in excess of 1.5 billion shillings and institutional capital above 500 million shillings to apply to for a license from the Central Bank. Bank of Uganda (BoU) has since developed regulations for these SACCOs.

“The principles of SACCOs are different from where they are taking us. BoU has been regulating banks. Now they are taking SACCOs (which are member owned and operating under the Cooperative Act), and placing them under Bank of Uganda Act and other regulations. We need to harmonise this,” Hon. Bintu said.

In 1999, BoU adopted a tiered approach to the regulation and supervision of financial service providers.

4 Tiers emerged and SACCOs were placed under Tier 4 (Microfinance institutions not supervised by BoU).

In July 2017, the Tier 4 Microfinance Institutions and Money Lenders Act (2016) was enacted, to regulate SACCOs and other Tier 4 institutions.

However, SACCO members have expressed concern over the Act. During a consultative dialogue organized by Uganda Cooperative Alliance (UCA) in May 2018, they said the Tier 4 Act makes SACCOs lose their identity as cooperatives and mainly focuses on licensing rather than operations.

Hon. Bintu gave re-assurance that the inconsistencies will be harmonised.

The MP was also instrumental in lobbying for the introduction and preservation of the 10-year Income Tax waiver for SACCOs, in 2017 and 2018, respectively.

She said the tax waiver will enable SACCOs to stabilise and build their internal capacity.

“When you tax SACCOs, you are likely to kill the morale and urge people have developed in saving, and yet here we are saying let’s promote a savings culture,” Hon. Bintu said. “After 10 years, we shall say now we are ready to pay taxes,” she added.

END.

The full list of newly elected UCSCU Board and Supervisory Committee (SUPCO) Members 2018/2019

Names Name of SACCO Position
1. Hon. Bintu Jalia Lukumu Parliamentarian SACCO Chairperson Board
2. Bongozya Stephen Shuuku SACCO Vice Chairman Board
3. Nkajja Derick FIC SACCO Treasurer
4. Komunda Annet Kihanga Mparo SACCO Board Member
5. Akanyihayo Fortunate Nyakibaale SACCO Board Member
6. Naliima Benedicto Mityana Mubende Teachers SACCO Chairman SUPCO
7. Mwanje Edie Drick Busaana SACCO SUPCO Member
8. Namugongo Charles Kyalule SACCO SUPCO Member

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Cooperative Movement Mourns Immediate Past President of ICA–Africa

The Cooperative Movement is disheartened by the death of Mr. Stanley Charles Muchiri, the immediate past President of the International Cooperative Alliance – Africa (ICA-Africa).

Mr. Muchiri died in Abuja, Nigeria, on 6 October 2018, after attending the 12th African Ministerial Cooperative Conference and 13th Regional Assembly for ICA-Africa. Three days prior to his death, he had retired from the position.

Mr. Muchiri served ICA-Africa as President from 2004 – 2018. During his tenure, he successfully promoted unity and strength, in addressing new challenges facing Africa.

ICA-Africa eulogises Mr. Muchiri as an illustrious cooperator who served ICA-Africa for 14 years.

ICA President, Mr. Japheth Magomere, said,

“As we celebrate the life of a hero, the Alliance Africa extends heartfelt sympathy to the family and friends of the late Mr. Stanley Charles Muchiri. We join the family and friends in mourning a departed cooperator icon in Africa.”

END.

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Cooperatives Envisage Reliable Market as New Warehousing Standard on Bagged Cereals Takes Effect

By Nancy Akullo

Kampala

Cooperatives can expect to attract more reliable market, local and foreign, as the warehousing Standard for bagged cereals and pulses takes effect.

Developed through consultation with major stakeholders, the Standard was launched by the Uganda Warehouse Receipt System Authority (UWRSA) on 25 September 2018.

The objective of the Standard is to promote; commodity exchange in the region, and the functioning of the Warehouse Receipt System, through providing guidance on appropriate storage practices.

In an interview with thecooperator Magazine, Ms. Deborah Kyarisiime, the Executive Director of UWRSA said the Standard was launched to address incoherence issues regarding storage.

“Uganda has so much storage. But not all of our storage is up to food storage standard. Yet food cannot be kept anywhere. The Standard was developed to address warehousing gaps that ultimately affect the value of commodities,” Ms. Kyarisiime said.

“Also, it was not proper for us to make recommendations to warehouse owners, without proper basis,” she added.

According to Ms. Kyarisiime, the major warehousing gaps are; inadequate ventilation, improper drainage and insufficient amenities such as hand washing points, changing rooms for staff, laboratories, offices and toilets.

The new Standard comprehensively address the issues. It provides specifications with regard to; location, structure, safety, management, pest control and record keeping. According to the Standard, building materials must conform to the National Building Regulations and Standards. Floors must be elevated and smooth (with no cracks), and translucent roofing sheets are advised as opposed to iron sheets and roofing tiles.

Ms. Kyarisiime urged cooperatives to own the standard and drive implementation. She said compliance will reduce postharvest losses and increase household income.

Mr. Francis Muhindo, the Assistant Warehouse Manager of Nyakatonzi Growers Cooperative Union, a warehousing service provider in Kasese said, “The new standard will promote quality produce standards at both indigenous and international levels which will attract more reliable markets for farmers’ products.”

Warehousing minimizes the effects price fluctuations by storing goods when supply exceeds demand and availing goods when demand exceeds supply. Through the Warehouse Receipt System, goods stored in a warehouse can be used as collateral for loans.

END.

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Lira District Employees’ SACCO Set for Its Second AGM in 5 Years

By Achai Ferdinand

Lira

Lira District Employees’ Savings and Credit Cooperative is set to hold its second Annual General Meeting (AGM) at the end of October 2018. This will be the Savings and Credit Cooperative (SACCO’s) second AGM since inception in 2012.

The Lira District Employees’ SACCO was founded with the aim of promoting savings and easy access to credit for the civil servants and the employees of Lira district local government.

However, according to members, the SACCO has not been viable. Some members have been dormant for the six years of its establishment.

Mrs. Akide Irene, the Principal Human Resource Officer of Lira district and also Secretary of the SACCO, says the institution is not dead but some gaps definitely need to be fixed.

Mrs. Akide attributed the SACCOs challenges to; a poor saving culture, transfers, interdiction and retirement of some members, and insufficient cooperative education, among other reasons.

She admitted that the SACCO had failed to convene an AGM for the last five years due to the above challenges, but gave reassurance that efforts are in place to address the gaps.

“It is already in plan for us to have our AGM before the end of October 2018, where all members are called to attend including those who are able to buy shares. Members will also suggest effective ways to revamp operations, for instance, election of competent leaders,” Mrs. Akide said.

Lira District Chairperson Mr. Alex Oremo Alot confirmed that he considers the SACCO not to be active. He tasked executives of cooperatives to be transparent in executing their duties while following the principles of cooperatives and respecting the constitution.

Mr. Oremo encouraged district staff to embrace cooperatives, as a key to development.

End.

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SACCOs Want Law on Loan Recovery

By Egessa Hajusu,

Busia

Savings and Credit Cooperatives (SACCOs) are grappling with loan recovery, after the revocation of the arbitration system. They are appealing to Parliament to enact a law to facilitate recovery of loans.

“The arbitration system through which SACCOs recovered loans was revoked after the commencement of the Tier 4 Microfinance Institutions and Money Lenders Act 2016 which came into force 1st July 2017,” said Albert, the Chairperson of Halala Halala SACCO in Busia district.

This has left SACCOs with no option but to file civil suits in Courts of law just like other businesses, and this has been to their detriment because of exorbitant legal costs.

SACCOs had hoped that the small claims system introduced by Courts would help them to easily recover loans below ten million shillings, but they were dismayed to learn that the system serves only individuals and not institutions.

They are appealing for: either a law; or a special desk in the Commercial Court division to expedite the loan recovery process.

Mr. Moses Tusubira, the Manager of Halala Halala SACCO said arbitration is the cheapest way to recover loans, since SACCOs pay the arbitrator after the recovery has been made, as opposed to engaging lawyers which requires tapping into the cooperators’ savings. The latter option financially cripples SACCOs.

“SACCOs that cannot afford lawyers are definitely kicked out of business,” he said and called for quick government intervention.

End.

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Members of the Coop 360 Network Trained in Good Governance

By Sarah Kisakye,

Kampala

Members of the Coop 360 Network were trained in the principles of good governance; business and financial management, from 1-3 October 2018, at Les Foyers de Charité (Namugongo-Kyoto).

The Coop 360 Network is an enterprise of The Uhuru Institute for Social Development. It is a member based platform through which cooperatives and other collective businesses are connected to industry players, and The Uhuru Institute’s products and services.

The training was an eye opener to the participants, who acquired skills to lead and grow more cooperatives in the country.

They spoke of the experience being life changing and they committed to make necessary adjustments in some structures within their cooperatives.

Ms. Atim Cecilia from Pedacon Cooperative Society said she acquired relevant Information Communication Technology (ICT) skills.

“Right now if you bring something concerning ICT, I can answer, not like before,” Ms. Atim said to fellow participants.

Mr. Tenderessy Zakayo Malinga from Sebei Elgon Cooperative Union said he acquired Monitoring and Evaluation skills.

Cooperators were grateful to The Uhuru Institute. They asked the Institute to continuously organise such trainings.

The Uhuru Institute Chief Executive Officer, Mr. Leonard Okello urged participants to be accountable and use the skills acquired to develop cooperatives.

An official from the Ministry of Trade, Industry and Cooperatives noted that cooperatives foster development.

‘’Cooperatives have the potential of increasing production, productivity, and value addition which are critical for Uganda’s transformation.’’

The Uhuru institute is actively involved in the revitalisation of cooperatives in Uganda and realises this through various enterprises, such as the Coop 360 network, Sokoni (an online market for cooperatives) and Freedom Fund (an enterprise that provides affordable credit to members of cooperative organisations), among others.

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