Archive for month: May, 2019

KAMPALA, Uganda: Uganda will have 20,000 registered cooperatives by the end of the year, the Cooperator has established.

According to figures from the Ministry of Trade, Industry, and Cooperatives, as of May 2019, there were about 18, 000 registered cooperatives in the country.

Mr. Joseph William Kitandwe, the Registrar Cooperatives in the Ministry of Trade, Industry, and Cooperatives told theCooperator that most unions are now starting to appreciate the issue of legalization by registering. “The number of cooperatives registering is increasing every day. As a registry we receive and process over 600 applications monthly from across the country,” he said. “At this rate, we hope to have 20,000 registered cooperatives by the end of 2019,” he added.

Due to their democratic and member-owned nature, cooperatives have been argued to possess huge potential for reducing poverty and social exclusion, as well as promoting rural and economic development.

It is Kitandwe’s department that’s responsible for policy formulation, planning, and coordination of Cooperatives development. As a registrar, he is responsible for supervising and monitoring cooperatives to ensure that they operate within the established cooperative laws and set objectives for the benefit of members.

Although there have been increased cooperatives activity across the country, the Western and Central regions are leading the pack. 48% of the registered SACCOs are in the central region, followed by western, eastern and northern regions.

Western region dominates in the dairy sector, while the eastern and northern regions dominate in crop farming and marketing. The cooperatives vary from Savings and Credit, Rural Producer Organisations, Energy Cooperatives, Area Cooperatives, among others. Others are service cooperatives, Consumer cooperatives, and those for Workers.

Notable successful SACCOs in the country include the Mukono, Kayunga and Masaka teachers’ SACCOS, while the unions include Bugisu Cooperative Union, Wamala Growers Cooperative Union, banyankore Kweterana, among others.

However, despite the increase in the number of registered cooperatives, challenges remain. Cooperatives’ Minister Fredrick Ngobi Gume noted that issues of poor leadership and governance, coupled with inadequate capitalization remain of concern.

Various cooperatives that thecooperator talked to across the country also identified an inadequate market for member products as well as management fraud as some of the other issues facing cooperatives.

Leonard Okello, the Managing Director of The Uhuru Institute for Social Development noted that it’s such issues that the Institute is trying to address. “We’re training the cooperators on financial management, leadership and good governance, audit and financial records management, proper business plans and accountability. These are issues we believe are critical to cooperatives’ growth,” he said.

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Co-operative Bank’s shareholders will recoup their investment in full this year from dividend payouts with Co-op Holdings Co-operative Society getting the largest payout of Ksh 3.78 billion.

This year’s dividend payment is the highest ever, and matches the entire initial investment by the Co-operative Movement in the Bank thereby enabling them to annually literally recoup their investment in full, and has been regarded as ‘Shilling-for-Shilling’ dividend payout.

The Chairman of Co-op Holdings Co-operative Society applauded the uniqueness of the Cooperative financial system that touches over 22,000 saccos following the remarkable performance of the lender that reported a pretax profit of Ksh 18.2 billion in 2018.

Read also: Five top saccos boast Ksh149bn savings, assets

Police SACCO fails to account for Shs.5billion, faces forensic audit.

Mr Macloud Malonza aired his sentiments at a brief cheque presentation ceremony at the bank’s head office yesterday where the Chairman of the Bank Mr John Murugu together with the bank’s Group Managing Director and CEO Dr Gideon Muriuki presented a dividend cheque of Ksh 3.78 billion to Co-opholding Cooperative Society.

The Society has a 64.5 per cent stake in Co-operative Bank as a strategic shareholder representing Kenya’s Co-operative Movement and was formed in 2008 to facilitate the listing of the bank on the Nairobi Securities Exchange (NSE) in 2008.

The lender has maintained a strong dividend track record on the back of a sound sustained profitability growth over the years. Coop bank has grown over the years to now the third largest bank in the region with an asset base of over Ksh 425 billion.This week, it reported a profit before tax of Ksh 5.1 billion for the first quarter of this year. (Source / Standard Digital)

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Gutu,Zimbabwe: The Ministry of Women Affairs, Gender and Community Development has to date registered 600 cooperatives in its database with a membership of over three million people under the sector countrywide.

Women Affairs Minister, Dr Sithembiso Nyoni, revealed this during an AFM Church’s royal queen conference at Chatsworth in Gutu, an event that was also graced by First Lady, Auxillia Mnangagwa.

Dr Nyoni said a total of 7131 women in Masvingo had opened accounts with the recently established Zimbabwe Women Microfinance Bank (ZWMB) as part of Government efforts to promote women and community development initiatives.

“My ministry has many departments, but I will zero in on empowerment. Women should have their own business so that we are not oppressed, but being submissive to our husbands. Women need training and my ministry is ready to provide that training wherever you are as congregants,” she said.

“So far, we administer more than 600 cooperatives across the country with a membership of at least three million people. In Masvingo province, 7 131 women have opened accounts with Zimbabwe Women Microfinance Bank (ZWMB).”

Dr Nyoni said people in Masvingo had also formed and registered fishing projects at the multi-million Tugwi-Mukosi Dam with many beneficiaries coming from Chivi District. She said the province had close to 260 fishing co-operatives of which 128 were in Chivi.

“As women in church you can also buy cages at the dam, to be part of fishery projects and also form savings cooperatives where you save your money,” said Dr Nyoni.

Also read: Women Urged to Join Cooperatives, call for more inclusion in Leadership.

Stop dreaming about jobs abroad women, youths told

She said government through her ministry had established incubation hubs to provide platforms to equip women with different hands-on skills. The incubation hubs, she said, were located in Harare and other major cities.

“We have enough incubation hubs that can train women on how to bake bread whose price is beyond the reach of many. In addition, we also want to promote our traditional food through cultural food festivals that we will hold next week. Our First Lady, Amai Auxillia Mnangagwa is spearheading this.

“We also market your products at the Zimbabwe International Trade Fair (ZITF), provincial fairs and I also encourage you as AFM to do your own fairs,” said Dr Nyoni.

She acknowledged that some women were short-changed in certain business deals, but said government was committed to economically empower them through the introduction of financial facilities to improve access to funding.

Dr Nyoni said women can also make use of the Small and Medium Enterprises Development Corporation (SMEDCO) to access funding for their cooperatives.

“We also have a community development fund and women’s development fund. This fund is accessed through the ministry. In every ward, we have our officers who can assist you to access financial services.

“In Masvingo, we have partners that work with the Women’s Bank such as Metbank and NetOne, which provides a mobile platform for account holders. Women can use their phones to apply for loans,” she said. (Source/ The Chronicle)

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Kampala, Uganda: Police’s main savings’ scheme – Exodus Savings and Credit Cooperative society is undergoing a forensic audit, after allegations of improper accountability from the SACCO’s members, theCooperator has learnt.

The SACCO, which boasts of 28000 members, is the Forces’ third biggest financial cooperative in the country, after the Uganda People’s Defense Forces’ Wazalendo SACCO, and the Uganda Prison Services’ SACCO. With savings of up to Shs.200billion,Wazalendo is Uganda’s biggest financial cooperative, while at an assets’ worth of shs.6billion and 9,385 members strong, the Prison Services’ SACCO is not in bad standing either.

But unlike the two, the Police SACCO has for long been beset by controversy, ranging from allegations of improper accountability to members’ failure to have timely access to their savings.

Mr. Joseph Kitandwe, the registrar of cooperatives who ordered the SACCO’s audit says, it had become inevitable:

“We were getting tired of always hearing about their issues. I therefore ordered(the audit) following reports of missing members’ cash. Let all it(the SACCO)’s books be audited afresh,” he told the Cooperator in a telephone Interview.

According to Kitandwe, the SACCO management has never produced “proper” books of accounts since its formation in 2007: “I gave them (top Exodus management) a time frame to have the proper audited books in place. That time has now passed, and the police is yet to respond,” he said.

He attributed some of the inconsistencies in the SACCO’s books of accounts to the turnover of leadership at the SACCO, thanks to routine transfers of staff, some who’re vital for audit.

Asked to comment when he expects feedback from the auditors, Kitandwe said: “I expect all audited books within two weeks’ (by June). This time they must meet the set deadline,”

Two factions at loggerheads

Exodus is not the only Police SACCO. In 1989, the former Police chief Mr. John Kisembo and former head of criminal investigations Mr. Chris Bakiza had formed the Uganda Police Savings Association Limited. Then, 18 years later, in 2007, then Police Chief Kale Kayihura started Exodus Savings and Credit Society. Much as both institutions have as their objective to mobilize savings and give loans to the members at reasonable interest rates to better their livelihoods, the current crisis at Exodus SACCO has left many members disgruntled.

At the heart of the crisis is shs.5billion of member savings, for which Exodus cannot apparently account. The cooperator has learnt that before his unceremonious exit, Kayihura had himself ordered for a forensic audit to establish the circumstances under-which the money went missing. More than a year later, the results of that audit are yet to be made public.

Last month, there was mini-chaos at the Exodus offices when tens of members stormed the SACCO to withdraw cash for the Easter season. On that day, Shs.490 million was withdrawn by members, the cooperator has learnt.

In a statement issued by the deputy police spokesperson Polly Namaye, pointed out that there was not mayhem, but overcrowding by many members from across the country. When contacted, Mr. Henry Kalulu, the Exodus chairman reinforced Namaye’s explanation, attributed the fracas to a number of upcountry members who chose to come to the main headquarters in Kampala for their cash.

According to close sources who chose anonymity to speak comfortably on the matter, the said members stormed the SACCO headquarters after the regional branches where they used to get the SACCO services long ceased to offer loans or any financial services to them.

But Namaye refutes the claim that Exodus’ regional branches are no longer operational. Speaking to the Cooperator, she said the force maintains 10 regional centers across the country, where members can access the SACCO services. The centers are in Hoima, Mbarara, Mbale, Kabarole, Gulu, Moroto, Masaka, Arua, Lira, and now, Kabale, whose branch was opened early this month. Two other branches in Soroti and Iganga are expected to be opened to the members by end of June, she said.

Solving the problem

Following the Easter embarrassment, the Cooperator has established that the IGP, John Martins Okoth Ochola ordered and demanded that the “mess” be sorted out once and for all. As part of “sorting” the “mess,” the cooperator has learnt that the SACCO is in the process of establishing a banking hall, where members will henceforth be lining up like in any other bank, when depositing and withdrawing their savings.

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Co-operative organisation has called Saccos to trade at the Nairobi Stock Exchange and buy government securities to raise adequate funds and register a growth to their members.

According to Co-operative Alliance of Kenya chief executive Dan Marube the societies depending on members share contributions, internal reserves and deposits to lend to the same members have unlimited sources of funds.

Savings and Credit Co-operatives should trade at the Nairobi Stock Exchange and buy government securities to diversify their revenue portfolios.

Co-operative Alliance of Kenya chief executive Dan Marube said most Saccos currently heavily depend on member’s savings, internal reserves and deposits for their lending.

“This can be taken up as a business decision on the less risky instruments rather than a policy, to raise funds that can be lent to members at affordable rates,” Marube said.

In its draft 2019 National Co-operative Development policy, the alliance proposes that Saccos participate in national payment system and agency banking.

“The policy objective will enhance financial deepening and investments through interventions in development of a regulatory framework for co-operative enterprises to raise capital using capital market instruments and the establishment of a secondary market for cooperative securities,” says the draft policy stated.

By 2017, CAK had 13,200 Saccos with accumulated savings and deposits of over Ksh430 billion, Ksh441 billion in loans and Ksh601 billion in assets.

The Saccos had a membership of about 5 million persons.

“Despite this notable success, the Saccos are unable to accumulate savings and deposits fast enough to satisfy their members appetite for credit,” says the policy.

Due to this, Saccos rely heavily on loans from commercial banks to satisfy their members borrowing needs defeating the very purpose of coming together.

The problem is further compounded by the emergence of digital platforms offering access to quick loans.

According to Marube, the new venture would be a viable commitment especially if a society has enough funds.

The alliance has also raised worries on the practice of hypothecation, where debtor or third party pledges collateral for credit by financial institutions.

The practice has tended to encourage lenders not to evaluate the business case of the society borrowing which is mainly to increase produce, value addition or revenue, while relying on member earnings or payroll deductions for society cash flow projections.

“The same lenders have tended to continue to recover loans from members’ funds instead of realising the secured assets in case of default,” it added.

Despite this, the co-operatives expect to continue competing with some of the financial institutions over the same space despite their inability to raise funds through the national financial networks. (Source/ The Star)

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