Sembabule’s Taala Ya Mawogola plots comeback, 4 years after collapse

SEMBABULE: Plans are underway to revive Taala Ya Mawogola Savings and Credit Cooperative Society Ltd, four years after the SACCO collapsed, theCooperator has learned.

Simon Peter Ddungu, the Sembabule District Commercial Officer told theCooperator that the district leadership had resolved to mobilize widely for the revival of the SACCO, owing to the significant role the SACCO was playing in shoring up the economic fortunes of the district’s residents.

Tracing back the SACCO’s roots.

For close to ten years, Taala Ya Mawongola SACCO was the oldest community-based Microfinance institution in Sembabule district, growing to rank among the leading SACCOs in Masaka sub region.

Headquartered in present-day Mateete Town council, the SACCO had been founded in 2005, one of the very first financial institutions in the district, to safeguard people’s savings and provide soft loans to shore up mushrooming SMEs in the region.

Godfrey Mutamba, one of the founder members of the defunct SACCO revealed that the SACCO was a joint idea of thirteen prominent farmers in Mateete Sub county, whose interest was to pull together resources through a savings scheme and eventually lend it to people that needed pushup capital at affordable interest rates.

“People gradually embraced the idea because it was being advanced by people of repute in the area. And the SACCO was opened to people from all walks of life who began saving with it, leading to its expansion,” he told theCooperator.

To qualify for a loan of say Shs.1million, SACCO members were required to pay a registration fee of 10,000 shillings and buy ten shares at Shs.12,000.

According to available records, by 2011, Taala Ya Mawogola SACCO had accumulated a loan book of more than shs.1.3 billion, comprising of members’ savings, share capital and Interest accumulated on loans.

The Microfinance had also opened two other branches in Sembabule Town Council and Bukomansimbi district, expanding its membership to over 5,000 direct clients.

By then, Mutamba told theCooperator, the SACCO had supported several successful local enterprise groups which they hoped would later merge into a union and later transform the SACCO into a cooperative bank.

Trouble knocks.

All the SACCO’s plans were however dashed when in 2011, the General manager disappeared with members’ savings, setting in motion a slow and gradual collapse of the SACCO.

Benon Ssebyanzi, one of the affected members recounted to theCooperator that in May 2011, rumors of financial mismanagement at the SACCO started emerging, prompting members to demands for a special audit and investigation of the General Manager, Ibrahim Were.

According to Ssebyanzi, during the members’ Annual General Meeting that year, Were asked for time to prepare a report before he could leave office, but would instead disappear with over Shs.600 million of members’ savings a few days later.

When an external audit was eventually done by the Uganda Microfinance Support Center (MSC), it was found that the SACCO had suffered an even bigger financial loss of Shs.83o million in syndicate fraud.

The report showed that the money had been swindled while in transit to the SACCO’s account in a commercial bank in Masaka. It (the report) faulted the SACCO’s board for accepting to be manipulated into signing blank cheques, which allowed the general manager an opportunity to fill in any figures he wished, before withdrawing the money that could not be accounted for.

Eventual collapse

Yudaya Namirembe, another member of the SACCO says the fraud become the precursor to the eventual collapse of the institution, whose public trust had been severely eroded.

“We tried to retrieve our deposits in vain, despite having our deposit books indicating account balances,” she says, adding that even creditors chose to default on their loans.

Frank Lubowa, the Chairperson of the new board which was constituted to try and keep the SACCO afloat in 2014 says their efforts did not yield any results.

“We had secured another loan of Sh.70million from the Micro-Finance Support Center to recapitalize the SACCO, but all the money was eventually spent clearing members whom the SACCO owed money,” he explained.

The SACCO finally closed shop in 2015.

Attempting a comeback.

The SACCO’s collapse left a significant void in the economic life of the district’s residents, affecting the overall productivity in the district.

Ddungu assured theCooperator that the district leadership is determined to bring the SACCO back to life. “We cannot afford to lose that SACCO completely,” he told us.

“We are exploiting all public spaces like churches, Mosques and social gatherings to mobilize these people to rebuild the SACCO after all their assets are still intact,” he added.

In March this year, the Micro-Finance Support Center attempted to attach the SACCO buildings to recover its loan debt, but according to Ddungu, the government intervened and secured the SACCO’s assets.

He is also optimistic that going forward, with the new Uganda Microfinance Regulatory Authority, irregularities such as the ones that led to Taala Ya Mawogola’s collapse will be detected in time to prevent the fate that befell their SACCO.

The post Sembabule’s Taala Ya Mawogola plots comeback, 4 years after collapse appeared first on The Cooperator News.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply