Youth transform savings group into sh1b SACCO

What started as a small savings group for eight young men has grown into Ruhinda Sub-County Kampala Residents United SACCO (RUKUSA), a Savings and Credit Co-operative Organisation that is transforming lives. Every month, the 213 members meet.

They save, buy shares and also access credit facilities which they use to start and grow their businesses.

Others use the loans to further their education or acquire properties, including land and decent homes. On February 28, the group will celebrate hitting a sh1b portfolio and five years of fruitful existence.

The SACCOS was registered in 2021. By December last year, RUKUSA had a portfolio of sh978m, and this month they made sh1b. It also employs two full-time staff — an administrator and finance officer.

Meanwhile, members come from different walks of life. They include market vendors, entrepreneurs, housewives, civil servants and professionals. But one thing is common with them.

They are like family; all hail from Rukungiri district or are married there. This is a basic requirement which the leaders do not compromise on.

Vanansio Natuhwera Bagateireyo, the SACCOS chairperson, says they are open to admitting up to 2,000 members, so long as they were either born or raised in Rukungiri district or are married there.

Because of marriage, the group has members from northern, eastern and the central region. Their children, too, are accepted. In addition, an applicant should have two guarantors who are already members.

The SACCOS leadership awarding a member, who had bought many shares with a gift voucher.

In other words, even if you come from Rukungiri but have no members to guarantee you, your application is rejected. Lastly, one also needs a national ID and sh100,000 subscription fee.

“Our requirements are few, but strict,” Natuhwera says, adding that it has helped to keep RUKUSA on the growth trajectory. Why? He says, it is easy to trace loan defaulters, and for that, in the last five years, no member has defaulted on their loans because “they are aware that they have nowhere to hide”. Defaulting also affects the guarantors.

Attractive products for growth 

On what has enabled them to prosper, Erasmus Akankwasa, the treasurer, says they are hinged on three aspects: saving, shares and lending. Every member has to comply.

Saving and buying shares are mandatory. Loans are optional, but they are designed in such a way that they are attractive, easy to access and convenient to pay back.

For example, a member can apply for a quick loan of up to sh5m and receive it on the same day.

The same applies to emergency and school fees loans. However, an in-house insurance of 1% applies.

Quick loans are at 1.5% per month on reducing balance, and emergency loans are fixed at 1% per month. Business loans go up to sh100m at 8% per annum.

Natuhwera addressing the SACCOS members during their annual general meeting, recently.

By December last year, quick loans had fetched sh538m for the SACCOS, Prime loans brought in sh143m, while emergency loans had sh127m.

Another loan product is the decentliving, which is graded into Decent Living 1, 2 and 3.

Here, the loans committee offers loans to individuals or couples to buy land or construct homes and rentals.

Akankwasa says they strive to see that every member owns a decent home, whether in Kampala, in Rukungiri or in any place of their choice.

“You can take a loan and buy land. Upon completion, you take another one for construction,” he says.

So far, about 40% of the members have benefited. Decent Living 1 gives up to sh20m, Decent Living stops at sh30m, and Decent Living 3 has no limit. Interest is between 1-10% per annum, payable in three to five years.

But also, the committee helps the member to do due diligence and negotiations on the land one wants to buy to avoid being duped.

After all is done, RUKUSA pays off the land in lump sum, and the title is reserved until the member completes the loan. Back to savings, Akankwasa says, at first, it was hard for some members to save.

The leaders decided to keep it at sh50,000 monthly, and it is compulsory. Millions have been collected over the years.

However, Akankwasa says they realised savings alone cannot take them far. So, they introduced shares. Every year, a member is mandated to buy at least two shares at sh100,000.

Some of RUKUSA members at the annual general meeting.

In addition, others buy voluntary shares that are not limited. Some members have bought shares worth sh15m. Last year alone, RUKUSA collected sh69m from the voluntary shares.

Away from that, Natuhwera says discipline, transparency and accountability have sustained their SACCOS. Every month, they hold a meeting, and all members are obligated to attend.

The latecomers are fined between sh5,000-sh30,000. These fines also generate revenue.

Additionally, RUKUSA is keen on leadership and systems. At the helm are the chairperson, treasurer, general secretary and board members. There are also committees that oversee the different departments.

On how the leaders are chosen, Akankwasa says, members consider integrity, trust and people who are committed and exemplary. Accountability is also prioritised. They keep records and also hire an external auditor to check the cracks.

That is not all. They also file returns and work with commercial officers from the Ministry of Trade, Ministry of Trade Co-operatives and Uganda Microfinance Regulatory Authority (UMRA) for guidance.

The SACCOS has also digitalised the accounting and monitoring systems. Members can now access the services from anywhere without going to their offices located in Ntinda, Kampala.

Money is then wired to their accounts. Besides, members are also committed to the SACCOS and this has helped it to grow. They attend meetings, remit their savings, buy shares and also pay up their loans.

To Akankwasa: “A SACCO can’t grow without commitment and trust”. But there are also more safeguards in place.

The supervisory committee and auditors ensure leaders don’t embezzle funds. Departments submit reports as well. For sustainability, he says, they have junior savers accounts where they inspire their children to save while learning how to manage RUKUSA.

From savings group to SACCOS 

Success didn’t just happen for RUKUSA. They worked hard for it. Looking back, Natuhwera says, when they started in March 2010, they anticipated to grow in two years, little did they know that the road was bumpy. It was not until 2021 that they qualified to register as a SACCOS. 

They had tried for years and failed to meet even the minimum requirement of 30 members.

To take you back a bit, on the first day when the eight pioneers met, they had wanted to pool funds to support the construction of Rwoya Church back home in Ruhinda sub-county. But in that while, one of them suggested a savings group.

They bought the idea and started immediately, each contributing sh20,000. One of them borrowed it, and they never looked back.

Next, they invited other colleagues from Ruhinda, who were staying in Kampala. By the end of the year, there were 15 members, meeting every month to save and acquire loans as well.

They also elected a chairman, secretary and treasurer. What’s more, they registered the group as a company limited by guarantee with the Uganda Registration Services Bureau (URSB).

They then opened it up to people from Rukungiri district, but living in Kampala. Initially, they had limited it to only those from Ruhinda, which slowed down their growth.

Besides, some members would default because there were no strict rules. The group depended on trust and learnt the hard way. So, after registration, they embarked on training, enrolment of new members and introducing loan products.

The number grew to 180 by 2019, and by that time, the savings amount had increased from sh20,000 to sh70,000 monthly. But when COVID-19 hit the world in 2020, many members were affected.

They reduced the savings to sh50,000, and in 2021, the company was registered as a SACCOS. It currently has 213 members, and it is still growing.

“We are in a better place now, but we still grapple with inadequate capital,” Natuhwera says.

On a good note, however, the SACCOS recently qualified for a sh100m loan from the Microfinance Support Centre (MSC). Natuhwera calls upon people from Rukungiri district who reside anywhere in Uganda and the diaspora to join RUKUSA and be part of the journey as the SACCOS grows into a bank in the near future.

Asked about the conditions under which a member is disqualified, he says: “We have so far terminated membership for four people, who were not complying with the policies. We pleaded with them to save, pay up their loans and attend meetings, but they refused.”

Commuinty impact 

In RUKUSA’s five-year strategic plan, the group envisions opening up branches in Rukungiri district, enrolling new members and doing some heavy lifting by supporting schools, needy families and health facilities.

By that time, they project the SACCO to have hit sh10b. But also, the majority of the members will be landlords under the decent living project.

“SACCOS are the way to go. Ugandans should embrace them,” Natuhwera says. “They can rescue you in times of need where relatives, friends and banks cannot help. Getting a loan is very easy.”

He thanks the Government for the support, saying SACCOS don’t pay taxes, hence creating an enabling environment for them to thrive.

What others say 

Anitah Ninsiima

I work as a finance and administrative assistant at RUKUSA, but I am also a member. I joined in May 2023, and I have since enjoyed the benefits. I have been taking quick loans to pay for further education. I am doing my CPA, level three.

Urbans Benywanira

I had tried for many years to build a house and failed. It was an uphill task, but through the decent living project, my family is enjoying a decent home built by my wife and I using RUKUSA loans.