By Ahmed Mukiibi
The Uganda Savings and Credit Union Limited (UCSCU), an umbrella body of over 1,000 savings and credit cooperatives (SACCOs) has teamed up with a Kenyan insurance company to set up a jointly owned Insurance venture in Uganda to cover their businesses against risks.
The proposed joint venture, the Cooperative Insurance Company (CIC) Africa, Uganda”, will be owned by the Cooperative Insurance Company (CIC) Kenya which will contribute share capital of 51% will UCSCU jointly with the Cooperative sector will be contributing 49%
This was revealed at a consultative workshop for SACCOs from the Central region at the UCSCU head office at Maganjo near Kampala.
The idea to start a cooperative insurance in Uganda was adopted at the 37th Annual general meeting when members resolved to partner with the Cooperative Company of Kenya to incorporate a limited Liability Company in Uganda, CIC Africa (Uganda) Ltd to develop suitable insurance product for the cooperative sector.
Sylvester Ndiroramukama, the CEO of UCSCU, told New Vision that in order to strengthen the union and enhance the capacity of SACCOs on the road to sustainability, UCSCU partnered with CIC Kenya to introduce a Cooperative insurance.
Ndiroramukama said that consultation among the stakeholders has been held throughout the country and they hope to complete the registration process and to put in place all modalities before September this year when they will be operational.
The CEO of CIS Kenya, Kuria Nelson said during the consultations, that the joint venture will promote access to insurance for the hitherto marginalized groups by targeting the bottom pyramid with micro insurance programmes.
He said this venture will no doubt promote the Cooperative sector because of its unique business model, one owned by the people .
Kuria said some of the pacakages that they intend to put on market include; Loan guard, that covers all loan balances in the event of death or total permanent disability of a group or society members
“ We shall also offer Microfinance Insurance, a specialized group creditor life insurance policy customized to cover short-term loan balances on reducing balance basis for small scale businesses”, Kuria said.
He explained that this policy pays off the loan outstanding in the event that the insured borrower dies within the insurance period.
Another package, Kuria said, is the Group Life Assurance scheme which provides for a lump sum to be paid in the event of the death of a member of the scheme provided that member is still in the service of the employer or scheme holder.
This cover enables the employer/scheme holder to alleviate the financial distress that might befall the dependents of an insured member upon death.
The chairman of the board of UCSCU, Nnume Yasin Abubaker explained that with the cooperative insurance in place, loan recovery will no longer be a problem because many loans given out by SACCOs are not insured putting their money at risk.
He said the insurance business will be for members such that that even if they they are not compensated because no insurable risk thas occurred, they will share profits from the premium they will have paid because the revenue generated will be retained by their own company
Joseph Kitandwe of the Ministry of Trade, Industry and Cooperatives appealed to SACCOs and the Cooperative sector to warmly embrace the project because it will not only help boost the sector, it will be their own business from which they will reap dividends
He said the Ministry of Trade is in the process of reviving the defunct Cooperative Bank and explained that Cabinet has tasked the Ministry to write a paper on how to revive the Bank, which they have already done and forwarded to them for approval.
Also related to this story
Fill in your Name and Email Address to receive a Free Newsletter
SACCOs in joint venture with Cooperative Insurance Company