CBS PEWOSA SACCOs empower community growth and economic inclusion in Buganda: Part 2

 Read Part 1 here.

H. Mulindwa Wamala

PEWOSA in Buganda 

Buganda Kingdom has embraced the co- operative model, through the popular PEWOSA, now a household name among lower end income communities. PEWOSA has been a strategic entry point on the side of the kingdom, The program has been orienting the masses on to the path of inclusive growth and development. The PEWOSA methodology has been a unique Co-operative intervention that offers the population in Buganda unique opportunities for leveraging financial access. It’s other advantages include enabling group will, discipline, cohesion, and putting together efforts for community members who are eligible and willing to champion their own self propelled cause for growth. 

This particular co-operative model has been diversely instrumental in empowering community members, the majority of whom are women operating small businesses. To be more specific, those  at local markets who vend raw farm produce of food items and vegetables, fish, used clothes, and related trades in basic livelihood supporting supplies. 

How the PEWOSA SACCO model has been working

Ideally, the co-operative model is popular for unleashing the creative energies of our people to lift themselves out of poverty. People, occasionally of smaller means, in similar occupations can come together and harness their income growth potential through the primary services of micro-deposit taking and lending.

SACCO services are exclusively broad across incomes, occupations, gender groups, and a wide array of economic activities. Mobilisation of savings and the pooling of funds to facilitate financial intermediation among the lower end income population of communities. While the SACCOs focus on serving the eligible poor for both social and economic needs, Savings can be drawn to meet social safety net purposes, but credit will be intended only for those who can use it in income generating activities or those that already have the means to reimburse it. Today, market forces also push SACCOs to begin considering dispensing credit to non where default risk is considerably lower.  The disadvantage is that SACCOs  will compromise themselves on the principles and values that come with social bonding and solidarity. 

PEWOSA from the beginning

At its inception way back in 1998, PEWOSA was a corporate social responsibility program initiative coined by members of the board of governors of the Central Broadcasting Services Radio (CBS) to assist women in combating poverty in their families through savings and offering credit to them. PEWOSA means “Project to Empower Women Through Savings and Loan Associations.” Today, this has been expanded beyond women, and PEWOSA serves people of all walks of life doing diverse economic activities. PEWOSA services are widely spread out across Buganda and reachout co about 5 million people altogether.

The Stromme Foundation, an international humanitarian organisation, offered financial support for capacity building for people enrolled in groups of 30. 

Under a program dubbed “Community Managed Microfinance (CMMF)”, These groups are mobilised, and with the patronage of PEWOSA NGO field extension staff, the groups are trained and guided, and their leadership receives mentorship. Nurturing under CMMF groups takes between 2-3 years before being ushered fully into the fully fledged PEWOSA SACCO structure. The process concludes when a CMMF group is registered under a PEWOSA SACCO. The NGO arm of the PEWOSA program is responsible for this training program under the apex leadership of Mrs. Florence Luwedde, who is now the director. This is how CBS PEWOSA SACCOs have expanded. Therefore, her service experience is quite commendable, along with that of other prominent names today at the helm of CBS PEWOSA SACCO movement leadership throughout the kingdom. Owek.Vincent Bbaale Mugera, Omuk. Daniel Ssentumbwe, Omuk. Michael Kawooya Mwebe, and Owek. Kaddu Kiberu. These names of exceptional individuals, along with others, many of whom are not mentioned here, were all instrumental right from the inception of CBS PEWOSA SACCO. 

The fruits of their efforts can be traced to the many, both direct and indirect, innumerable beneficiaries of the PEWOSA SACCOs across the county communities in Buganda where PEWOSA has ever set foot in its operation. Many of these service points (headquarters only) include Kyaddondo, Kampala, Busiro, Buddu, Ssese, Kabula, and others.

The SACCO operations have benefited large numbers of people who do business activities ranging from micro, small and some medium size enterprises. Common among the list are individual and family borrowers, Shop owners, farmers, market vendors (food and vegetable sellers), artisans, traders, wielders, carpenters, teachers, microentrepreneurs, cyclists, etc.

Challenges faced by SACCOs

PEWOSA services, of course, have been rapidly spreading and are now very popular in Buganda for the low income population, but these services have been delivered amid cost constraints on SACCO and their clients. Members’ default is attributed largely to several reasons, including drawing large membership from the informal sector, which has been a deterrent factor to progress. The majority of individual members are in informal occupations; some draw income from work in publicly restricted, unlawful, and gazetted places. They often lack information when major projects and government programs are kickstarted.

Occasionally, their business stalls are either vandalised to chase them or work areas shielded off to prevent further unlawful access. Whereas group guarantees are a common approach for securing credit in SACCOs, some members occasionally fail to honour their tenure obligations, and the burden and stress of recovering bad loans against group guarantees discourage the process. Levels of business intelligence among clients are not developed, and the majority are semi illiterate, have poor record skills, and lack analytical acumen in what they do. As a result, they cannot undertake consulting and support services. Most of our SACCOs suffer from governance problems. The problem can be diagnosed as a combination of two extremes, one ethics and  systematic practice. Ethical dishonesty begins with personal interests overriding group merit. SACCO leaders prevent growth and put the sustainability of the institution at stake. 

Abuse of fundamental principles and values for co-operative identity is major challenge that compromises the ethical standards and SACCO attributes of Member ownership, member use, member control, and member benefits are the hallmarks of ensuring that SACCOs remain relevant to their members. In effective SACCOs, the leadership at various levels appreciates these values of mutual trust, self-help, self-responsibility, democracy, equality, equity, and solidarity.

Systemic practice refers to a framework that defines professional functionality. This combines the leadership and governance structures, which manipulate institutional direction and control. This must be properly aligned with the regulatory framework and environmental needs.

In my opinion,

The Co-operative movement today has a global footprint, thus leaving a room wide open for references to their successes and failures at different locations. Purposeful benchmarks in areas of co-operative regulation, co-operative business model, and co-operative policy and practice will generate learning experiences for rebuilding a vibrant co-operative sector without diminishing their value and essence. 

Co-operatives are not a political tool for amassing support during election campaigns. The politics of state machinery should desist from interfering with social initiatives. What is necessary is total and adequate government support through Ministries, Departments, agencies, and development partners, including cultural institutions. 

Co-operative institutions too have a fundamental and shared obligation to deliver on the country’s vision for 2040. Co-operative success in that role will largely depend on how well we have empowered them; they need supported learning, deliberate programs to build robust governance systems, and operating infrastructural capabilities. For growth, sustainability, and resilience to take root in co-operative institutions, it will be absolutely necessary to strengthen approaches to uphold the cooperative spirit among people and universal cooperative principles, values, and ethos.

Educating the public to embrace the value of co-operation can have a far reaching impact as far as empowering people and their co-operative organisations are concerned. The larger the number of members, the greater the strength of a co-operative organisation. Large cooperatives can deliver successful advocacy; this factor also further enhances their capacity to generate more value for both members and the public. Cooperative education for the masses to get cooperative literacy and awareness requires a deliberate and larger government role in terms of financing, providing sufficient information to the public, and effective civic engagement through strategic partnerships with well established institutions, not to mention working with cultural institutions like Buganda Kingdom. 

Quite a number of challenges can be sorted; knowledge and skills provision for farmers to do collective value addition; financial literacy for enhanced community growth  and inclusion, quality improvement; reducing post harvesting losses and risks; Technology adaptation, collective wealth creation; and further empowering cooperatives to delve into global emerging challenges of development concern.

Habert Mulindwa Wamala is the Principal Trade and Co-operatives Officer, Kingdom of Buganda

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