Govt signs sh2b pact with co-op institution
Jan 17, 2006
THE Government has signed a sh2b agreement with the Uganda Cooperative Alliance (UCA) to extend saving and credit facilities to 592 underserved sub-counties.
By David Muwanga
THE Government has signed a sh2b agreement with the Uganda Cooperative Alliance (UCA) to extend saving and credit facilities to 592 underserved sub-counties.
The finance minister, Dr. Ezra Suruma, and UCA’s general secretary, Leonard Msemakweli, signed the agreement on Monday at the ministry’s boardroom in Kampala.
“Most financial institutions are concentrated in urban areas. As a result, the majority of people in rural areas lack bank accounts and have no formal means of saving. They cannot invest.
The programme will enable rural people access capital,†Suruma said.
“That is why last year in August, the Cabinet approved funds to support micro-finance institutions in order to help the rural people set up savings and credit cooperative organisations,†he said.
Suruma said, “The argument that poor people cannot save is false. They can save if they are sure of safe institutions with a good micro-economic environment.â€
He said micro-finance institutions charge high interest rates because of high operational costs.
“But as the Government supports them in putting up the infrastructure, training the people and sensitising them on the need to save and invest, the rates will be reduced as the institutions will have no other excuse,†Suruma said.
THE Government has signed a sh2b agreement with the Uganda Cooperative Alliance (UCA) to extend saving and credit facilities to 592 underserved sub-counties.
The finance minister, Dr. Ezra Suruma, and UCA’s general secretary, Leonard Msemakweli, signed the agreement on Monday at the ministry’s boardroom in Kampala.
“Most financial institutions are concentrated in urban areas. As a result, the majority of people in rural areas lack bank accounts and have no formal means of saving. They cannot invest.
The programme will enable rural people access capital,†Suruma said.
“That is why last year in August, the Cabinet approved funds to support micro-finance institutions in order to help the rural people set up savings and credit cooperative organisations,†he said.
Suruma said, “The argument that poor people cannot save is false. They can save if they are sure of safe institutions with a good micro-economic environment.â€
He said micro-finance institutions charge high interest rates because of high operational costs.
“But as the Government supports them in putting up the infrastructure, training the people and sensitising them on the need to save and invest, the rates will be reduced as the institutions will have no other excuse,†Suruma said.