SACCOs Want Law on Loan Recovery

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By Egessa Hajusu,

Busia

Savings and Credit Cooperatives (SACCOs) are grappling with loan recovery, after the revocation of the arbitration system. They are appealing to Parliament to enact a law to facilitate recovery of loans.

“The arbitration system through which SACCOs recovered loans was revoked after the commencement of the Tier 4 Microfinance Institutions and Money Lenders Act 2016 which came into force 1st July 2017,” said Albert, the Chairperson of Halala Halala SACCO in Busia district.

This has left SACCOs with no option but to file civil suits in Courts of law just like other businesses, and this has been to their detriment because of exorbitant legal costs.

SACCOs had hoped that the small claims system introduced by Courts would help them to easily recover loans below ten million shillings, but they were dismayed to learn that the system serves only individuals and not institutions.

They are appealing for: either a law; or a special desk in the Commercial Court division to expedite the loan recovery process.

Mr. Moses Tusubira, the Manager of Halala Halala SACCO said arbitration is the cheapest way to recover loans, since SACCOs pay the arbitrator after the recovery has been made, as opposed to engaging lawyers which requires tapping into the cooperators’ savings. The latter option financially cripples SACCOs.

“SACCOs that cannot afford lawyers are definitely kicked out of business,” he said and called for quick government intervention.

End.

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Members of the Coop 360 Network Trained in Good Governance

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By Sarah Kisakye,

Kampala

Members of the Coop 360 Network were trained in the principles of good governance; business and financial management, from 1-3 October 2018, at Les Foyers de Charité (Namugongo-Kyoto).

The Coop 360 Network is an enterprise of The Uhuru Institute for Social Development. It is a member based platform through which cooperatives and other collective businesses are connected to industry players, and The Uhuru Institute’s products and services.

The training was an eye opener to the participants, who acquired skills to lead and grow more cooperatives in the country.

They spoke of the experience being life changing and they committed to make necessary adjustments in some structures within their cooperatives.

Ms. Atim Cecilia from Pedacon Cooperative Society said she acquired relevant Information Communication Technology (ICT) skills.

“Right now if you bring something concerning ICT, I can answer, not like before,” Ms. Atim said to fellow participants.

Mr. Tenderessy Zakayo Malinga from Sebei Elgon Cooperative Union said he acquired Monitoring and Evaluation skills.

Cooperators were grateful to The Uhuru Institute. They asked the Institute to continuously organise such trainings.

The Uhuru Institute Chief Executive Officer, Mr. Leonard Okello urged participants to be accountable and use the skills acquired to develop cooperatives.

An official from the Ministry of Trade, Industry and Cooperatives noted that cooperatives foster development.

‘’Cooperatives have the potential of increasing production, productivity, and value addition which are critical for Uganda’s transformation.’’

The Uhuru institute is actively involved in the revitalisation of cooperatives in Uganda and realises this through various enterprises, such as the Coop 360 network, Sokoni (an online market for cooperatives) and Freedom Fund (an enterprise that provides affordable credit to members of cooperative organisations), among others.

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Cooperatives to Benefit from We Effect, Vi Agroforestry Collaboration

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We Effect and Vi Agroforestry have combined office space to enable improved collaboration and stronger support for their projects.

While speaking at the launch of the new offices in Muyenga, in September 2018, Mr. Elijah Kajubi, the Programme Officer for Rural Development at We Effect, said that sharing office space will make the two organisations a stronger team.

“The structure is similar in Nairobi and other countries,” said Mr. Kajubi. “This set up gives us strength in terms of accessing resources from our donors, the Swedish International Development Agency (SIDA), he added.

We Effect will benefit from in-house experts in agroforestry, while Vi Agroforestry will benefit from We Effect’s long experience in working through partnerships.

Mr. Kajubi said that their clients, many of whom are cooperatives, will benefit from a wider knowledge and resource base.

“Vi Agroforestry has plenty of technical expertise in environmental sustainability. They are a diverse team which promotes; biogas usage, shed trees in coffee plantations, water conservation, use of clean energy, use of specific agroforestry tree species and generally agriculture. This means cooperatives will have easier access to resources on sustainable land management practices,” Mr. Kajubi said.

We Effect is a development organisation founded by the cooperative movement. The organisation supports projects that are meant to uplift and strengthen cooperatives.

Vi Agroforestry is a Swedish Development cooperation organisation, fighting poverty and improving the environment through agroforestry. The organisation promotes sustainable land management methods through training and expert advice, among other strategies.

The two are different organisations but with the same founders. Both are Swedish founded and born out of the cooperative movement. This means they have a very strong background because the cooperative movement in Sweden has been active for over 100 years.

To commemorate the event, leaders from the two organisations planted a tree.

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Minister Asks Cooperatives to Form their Own Bank

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State Minister for Cooperatives, Hon. Frederick Gume Ngobi has advised cooperative unions to form their own bank so as to compete favourably.

“Be dynamic, and react to your problems spontaneously. You cannot keep referring to the Bible verse which says, the way it is in the beginning; so shall it always be at the end. We are living in a new era of a liberalised economy,” he said, adding:

“I will keep reminding you to form your own bank. The commercial banks have profits, yet for you, you have savings.”

“With your own bank, it will be easier for your members to access credit,” the Minister said.

Hon. Gume was addressing delegates attending the 44th Annual General Meeting of the Uganda Cooperative Savings and Credit Union (UCSCU) held at the Grand Imperial Hotel on 28 September 2018.

Some cooperators have welcomed the idea to form a new bank, saying that cooperatives have the ability to mobilise ample resources.

Mr. Sylivester Ndiroramukama, the CEO of UCSCU said, “This is long overdue. We can mobilise ourselves and raise resources. If every institution buys shares in the bank, we will be able to raise enough.”

Mr. Ndiroramukama said that cooperatives should start the process, and government can support later. He maintained that emphasis should be on ownership, for proper administration and control. Mr. Ndiroramukama further advised that it is important for the name of the bank to change, so that it does not inherit the liabilities of the defunct cooperative bank.

Access to affordable credit remains a challenge for many cooperatives, especially start-up farmer cooperatives in rural areas, which cannot meet the stringent terms of commercial banks.

Yet for a while now, there have been several discussions pertaining to the revival of the defunct cooperative bank, with minimal substantive action.

In 2018, a feasibility study was conducted by Uganda Cooperative Alliance (UCA). UCA General Secretary, CPA Ivan Asiimwe has advised that the best way to revive the Cooperative Bank is through initial 100% financing by government and gradual divestiture to cooperatives and the public, once the bank has stabilized.

The Cooperative Bank was dissolved in 1999. A liquidation report for the defunct bank has hitherto not been produced by Bank of Uganda.

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Teso Fruit Factory to Be Commissioned at End of October 2018

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By Alexander Okori,

Soroti

The long awaited multi-billion Teso fruit factory is set to be commissioned this month, October 2018. To boost returns through increased bargaining power, citrus farmers have been urged to form cooperatives.

“I appeal to farmers to form cooperatives in their districts and sub-counties. These will in turn have citrus collection centres where buyers will come at specific days,” said Mr. Jorem Opian, the Chairman of Teso Tropical Fruit Cooperative Union.

While speaking at a meeting with citrus farmers in September 2018, Mr. Opian said many farmers sell their citrus individually during market days, and fetch low returns due to exploitation by middlemen.

“I have seen brokers buying oranges at Soroti market, where many farmers sell a 100 kilogram sack at average of Shs. 25000-30000, which is comparatively low. If those farmers sold their oranges per kilogram, they would probably fetch twice the price,” said Mr. Opian.

The establishment of the factory has been an ongoing project since 2015 and many have expressed concern over the delay in schedule.

In September 2018, Minister for Trade, Industry and Cooperatives, Hon. Amelia Kyambadde reaffirmed government’s commitment to ensure that the factory begins commercial production in late October 2018. The Minister was speaking during a ceremony to hand over 40 mechanical spray pumps to Teso Tropical Fruit Cooperative Union.

“The factory is expected to process; over six metric tons of oranges per hour, two metric tonnes of mangoes per hour and four metric tonnes of pineapple per hour, amounting to 648,000 tonnes of oranges per year and 25,000 tonnes of mangoes per year,” said Hon. Kyambadde.

The Minister said the objective of the project is to increase the incomes of the fruit farmers by providing readily accessible and fairly priced market.

Teso sub region has three million fruit trees with a potential production of 600,000 metric tonnes of fruit per year.

The contracted fruit supplier for the factory is Teso Tropical Fruit Cooperative Union yet their current supply does not meet the factory demand. Herein lies the opportunity for cooperatives.

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SACCO Leaders Welcome the Establishment of Local Committees to Promote Accountability

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By Egessa Hajusu,

Busia

Mr. Sam Lwande, the Manager of Lumino SACCO has welcomed the establishment of local problem solving committees, to aid the work of the Inspectorate of Government, at the district levels.

This, he said, will help SACCOs to recover stolen money and also serve as a deterrent measure to those planning to steal cooperative funds. Mr. Lwande attributed the collapse of some Savings and Credit Cooperatives (SACCOs) to; poor record keeping and accountability, envy, and poor leadership.

“Perpetrators of this abuse that is sometimes met with impunity will be addressed by the problem solving committees at the district,” said Mr. Lwande in a telephone interview with the Cooperator.

While speaking at a boardroom meeting in Busia district during the anti-corruption week, Mr. George Bamugemereire, the Deputy Inspector General of Government (IGG) said the IGG has embarked on measures of engaging all stakeholders in the fight against corruption. Mr. Bamugemereire said local governments have been asked to set up local problem handling mechanisms to facilitate the work of the Inspectorate of Government.

“Even if the government gives us all resources to have the man power we need we cannot be all over the country and this calls for the need to have informed citizens that can detect mal administration, wastage of resources and prevent it before it happens,” Mr. Bamugemereire said.

“Districts should therefore put in place local problem handling committees to address corruption cases in salaries, pension, recruitment, procurement among others. This will give the residents fast customer care and minimise long distance travel to the regional offices and Kampala to report corruption cases,” he added.

Mr. Lwande noted that the IGG’s word is not final and appealed to Parliament to pass an enabling law to make the committees operational. “Those committees are long overdue,” he said.

The Busia district acting chairperson asked Ugandans to learn to be accountable at all times. He said accountability is about doing thing the right way than providing receipts.

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