AGM: Bushenyi SACCOs continue to perform well despite Covid-19 huddles
BUSHENYI – Whereas most financial institutions are grappling to recover from Covid-19 pandemic, Kyamuhunga Peoples’ SACCO (KYAPS) in Bushenyi district is in the limelight for recording tremendous success during the financial year 2020/21.
This was revealed on Saturday during its 23rd Annual General Meeting (AGM) which was held at Kyamuhunga Catholic Parish main hall located in Bushenyi district.
According to Paul Turyamureeba Kahiigi, the SACCO board Chairman, KYAPS managed to register a profit of Shs 1,666,680,413 in the year 2021.
Kahiigi thanked the board members, and the management for pulling such a tremendous performance during the Covid-19 lockdown, a time when most businesses that contribute to the SACCOs’ liquidity had been halted.
John Bosco Atwijukire, the SACCO’s General Manager says, KYAPS currently desires to increase the external borrowing from Shs 4 billion to Shs 6 billion to boost its liquidity.
“Of course, we have been borrowing around Shs.4 billion but when we held a meeting, members asked us to increase the commercial loans which we shall have to sit and look into; in order to boost our loan performance because this shows that members still need more money to invest and we cannot limit them because this is their SACCO, ours is to guide and show them the good way to go,” Atwijukire said.
Dr Silver Mugisha, the Managing Director, National Water and Sewerage Corporation (NWSC) who was the Chief Guest warned of opening multiple branches which increases the cost of business-like paying staff, rent, transport among others.
“It is important to find a delicate balance of how many branches you can open so that you can make services easier for the people. But also, you don’t increase costs excessively to affect the value that members will be expecting at the end of the year,” he emphasized.
He maintained that SACCOs must go digital explaining that digital innovations are a good approach that reduces costs and increases efficiency of institutions.
The NWSC boss who is also a member of KYAPS encouraged the SACCO to venture into product diversification which is important for institutional sustainability.
“Product diversification is conventionally known as a strategy to enter into a new product or product lines, new services or new markets, involving substantially different skills, technology and knowledge. So, the board and management should sit and look at products being offered and think of which other products can be offered.”
He also called upon financial institutions to embrace digital innovations to reduce operational costs.
“You also need to go digital, but it is extremely important to see that the people you serve appreciate its importance because sometimes people are not comfortable with digitalization as some members find it okay when they go and transact physically at the bank,” Dr Mugisha emphasized.
According to Ms Sharon Nahabwe, the Principal Commercial Officer, Bushenyi district who is the former General Manager at Kyamuhunga Peoples’ Cooperative Savings and Credit Society, investing in research and innovation by SACCOs which literally means doing things differently from competitors comes with a competitive advantage and helps to achieve market leadership.
The Bushenyi district Resident District Commissioner (RDC), Ms Jane Asiimwe Muhindo who said that KYAPS clients were thrilled by President Yoweri Kaguta Museveni’s membership in the rural bank hailed KYAPS board and management for running a well-organized institution.
“We have so many cooperatives in Bushenyi but if there could be any transparent SACCO, Kyamuhunga is number one and I will extend this to the President and tell him that being one of its members, his savings do still exist and are secure,” says Muhindo.
KYAPS required legal rights to offer cooperative society services in 2004 and has since grown into a top-notch SACCO in Western Uganda with the capacity to run four branches including Butare (main branch), Katerera, Rutookye and Ishaka branch.
Also, Butuuro SACCO located in Bushenyi district recorded a resilient performance of Shs 542 million net profit in 2021 compared to Shs 227 million in 2020.
This was reported on Saturday during its 14th Annual General Meeting for the financial year (FY 2020/21).
According to Benson Barigye, the Board Chairman’s plan has been underway since 2020 for Butuuro SACCO to transition into a Microfinance Deposit Institution (MDI).
“As a SACCO, we have done what we could, and we believe that to make it more profitable we need to have better prices per share to the members,” Barigye said.
The Chairman adds that crossing to MDI, will expand the institution for the entire community to access financial services.
“With the MDI status, we can have other members of the community not necessarily being shareholders of the SACCO. The idea started two years ago. We presented it in the AGM and members bought the idea but asked the board to do more research,” Barigye emphasized.
However, he said the SACCO is only blocked by the Shs. 5 billion share capital requirement to start operating as MDI.
“We called Bank of Uganda officials in March 2021, and they took us through all the requirements for us to become an MDI and the assessment was that if we can improve on the share capital because we had all the necessary requirements except for the share capital which was Shs 5 billion and at that time we had only Shs 2 billion which we have been working hard to save,” Barigye explained.
The Chairman says the cooperative is not moved by Bank of Uganda’s proposal to increase the share capital requirement from Shs 5 billion to Shs 10 billion for one to run an MDI.
“We are still waiting for the proposal whether to be passed but for us we are determined even if the capital requirement is increased or not, we want to keep increasing our share capital to become a Microfinance Deposit Institution,” Barigye said.
Currently Butuuro SACCO has a total capital of Shs 2.1 billion, total turnover of around Shs1.9 billion and boasts of 11,000 members.
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