MADFA SACCO faces loan recovery challenges as farmers suffer losses
HOIMA, March 5, 2026 — Managers of MADFA SACCO have expressed concern over poor loan repayment by members, largely attributed to crop losses suffered by farmers following a prolonged drought.
MADFA SACCO has more than 9,287 members, the majority of whom are farmers engaged in maize production, sugarcane growing, and the cultivation of beans, soybeans and coffee, among other enterprises.
According to the SACCO’s 2025 report released days ago by Chief Executive Officer Bob Muzoora, the institution’s performance last year was below expectations compared to previous years.
“The average performance was mainly attributed to the drought experienced in both planting seasons across all branches, as well as the adoption of high standards for risk management, particularly loan provisioning,” the report states.
The report was presented during a pre-Annual General Meeting [pre-AGM] held at a Public Primary School in Hoima City. The SACCO’s branches organised pre-AGMs to prepare members for the Annual General Meeting scheduled for March 26, 2026.
While presenting the report, Amelia Nakazibwe, Risk and Compliance Manager at the SACCO noted that the SACCO had targeted 13,707 members in 2025 but failed to achieve this goal. As a result, projected growth in savings, share capital and the loan portfolio was not fully realised.
According to the report, savings increased by 29 percent, rising from Shs 3.2 billion in 2024 to Shs 4.1bln by the end of 2025. However, this fell short of the target of Shs 5bln.
On the other hand, share capital grew by 22 percent from Shs 1.1bln in 2024 to Shs 1.3bln in 2025, while the loan portfolio rose by 14 percent from Shs5.1bln to Shs 5.8bln over the same period.
The report further indicates that the targeted growth in share capital and deposits had been set at Shs 1.8bln and Shs 8bln respectively.
However, many farmers were unable to repay their loans due to crop destruction caused by the prolonged drought. Consequently, the SACCO’s profitability dropped sharply from Shs 231 million in 2024 to Shs 14mln in 2025, mainly due to increased loan loss provisioning expenses.
Loan loss provisions increased sixfold, from Shs 99,168,358 in 2024 to Shs 616,488,692 in 2025.
“The high loan loss provisioning expenses reflect poor loan repayment by members,” the report noted.
Innovation and new measures
Speaking at the same meeting, Muzoora said the SACCO is exploring new strategies to address the challenges faced by farmers.
He revealed that the society is partnering with an agro-consortium insurance company to provide coverage for farmers against losses caused by drought and other climate-related shocks.
Muzoora added that the SACCO has also adopted risk management standards set by the Bank of Uganda.
To grow membership, the SACCO has introduced an incentive of Shs 5,000 for every new account opened through member recruitment. The commission will be paid to individuals who successfully recruit new members.
In addition, the SACCO plans to introduce ATM cards and agency banking services to enable members to transact electronically and reduce the risks associated with carrying cash.
To improve participation in group activities, the SACCO is also introducing shared cards for group members to help monitor attendance at meetings.
Several members, however, said farmers continue to bear the brunt of climate change.
Justine Atugonza, a farmer and resident of Burungu village in Kitoba Subcounty, Hoima district, said many farmers incurred heavy losses due to unreliable rainfall last year.
“Last year I planted 10 acres of maize after acquiring a loan, but my gardens were hit by prolonged drought. I did not harvest anything and now I am struggling to repay the loan,” she said.
https://thecooperator.news/madfa-sacco-loan-portfolio-grows-39-percent/
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