State minister for finance, planning and economic development (microfinance) Caroline Okao Amali has warned politicians against interfering in the Savings and Credit Cooperatives (SACCOs) activities saying this has led majority of them to collapse.
By Jackie Nambogga
State minister for finance, planning and economic development (microfinance) AmaliCaroline Okao has warned politicians against interfering in the Savings and Credit Cooperatives (SACCOs) activities saying this has led majority of them to collapse.
In some districts, Amali said, politicians have borrowed money from SACCOs and have failed to pay back while others recommend their former chief campaigners and political mobilisers to be given money when they are not members.
The minister, who did not name any implicated politician and the districts where such incidents have been cited, said some politicians have a tendency of using their positions to instruct managers to act against the laws that govern their SACCOs.
“I know we can’t separate politics from SACCOs but there must be a limit; politicians should only interfere when members have gone off track like not convening annual general meetings and in incidents of mismanagement of the funds by the managers,” she said.
She added; “We have witnessed and heard of increased cases of theft and fraud in the SACCOs orchestrated by those in charge of management and governance leading to total mistrust or loss of confidence in these financial institutions by the public,” she said.
Amali was addressing SACCO members drawn from Butembe constituency at a function held at Mafubira health centre, Mafubira sub-county in Jinja district on Monday.
The function was organized by the area MP, Daudi Migereko (Butembe) who is also minister for lands, housing and urban development. Earlier, James Muganza, the Jinja district commercial officer (DCO) stressed the need to review the 1991 cooperative Act which he said contains loopholes.
Muganza said many people had been duped of their monies by institutions that disguise as SACCOs citing TEAM and Dutch International which conned over sh5b from Jinja residents.
Much as Jinja has a saving base of sh4.6b as at 31st of March this year with sh436m as share capital, Muganza told the minister that out of the 138 registered SACCOs, only 53 were active while 45 were semi-active and 40 were dormant and that getting their data was quite difficult.
In response, Amali announced that cabinet had approved a law and principles that will regulate and guide all micro finance institutions including the (SACCOs) so as to address the said challenges.
“The ministry of finance, planning and economic development has been championing to put in place a law to supervise and regulate these microfinance institutions including SACCOs which have been categorized as Tier 4 financial institutions,” she explained.
She said the new arrangement will cater for the finance institutions and SACCO’s with funds between sh500m to sh1.5b while those with funds of above sh1.5b will be supervised by Bank of Uganda.
Also the minister revealed a move to phase out the rural financial services programme (RFSP) at the end of this month which the Government, together with the International Fund for Agricultural Development (IFAD) has been implementing to support SACCOs across the country.
She however assured the locals that Government was in its advanced stages of negotiating another project with IFAD on financial inclusion to strengthen SACCOs for sustainability and also support the community based self-help groups (Nigiina) as an additional means of enhancing financial inclusion.
“The Nigiina’s are mostly composed of women and youth as such supporting them will bring into fold the large group of normally financially excluded segment of the target clients,” she explained.
Meanwhile Migereko asked Amali to peruse the documents of the various SACCOs in his constituency and boost them with resources so that members can be able to sustain their businesses, households and also meet school fees for their children.
Stop failing SACCOs - Finance minister warns politicians