MBARARA – Rubindi Parish Priest Rev Fr. Felix Bikwasizehi, patron of Rubindi Farmers’ SACCO has warned cooperative societies not to expand their footprint too quickly.
Forming new branches too quickly, he said, can be a huge drain on the meager resources of Savings Credit and Cooperative Societies (SACCOs).
“Let people first build trust in what you have started and prove that their money is well protected then when need calls, we will think of opening up other branches,” Bikwasizehi said on May 8, during the 12th Annual General Meeting at the cooperative’s main offices in Kashari, Mbarara District.
He said new branches create unnecessary administrative costs. He urged members to focus on building their equity to sustain the SACCO.
“For SACCOs to expand, they should first look at the performance of the main SACCO. If it has not been doing well then why do you hurry to expand?” Bikwasizehi asked.
If SACCOs have resources then they can expand – short of that they shouldn’t expand, expansions are a drain on resources, he said.
He nudged managers to invest members’ savings in short term money making businesses rather than focusing on assets.
“That’s why I am not in this business of putting up buildings because that means you are encroaching on members’ savings. Putting up a commercial building does not bring back money within a short time. It might take years and you might not get return on your investment,” Bikwasizehi said.
“For instance, Centenary Bank is a renowned commercial bank but it has got only one building and rents all its other branches. Even its employees don’t drive these posh cars, they only hire service cars,” he said.
He advised cooperatives not to rush for external loans but instead strengthen their portfolio.
“We started operating from the church in 2008. We were not more than 20 members, and then we grew to 200. Now we are 4,174 members. We now have over Shs 2 billion in members’ savings with no loan borrowed from any commercial banks,” he said.
“We have helped our people to develop the culture of saving. People used to borrow money from money lenders whose interest rate is high yet for us we have a reducing interest rate of 3%, which is pocket friendly,” he added.
Rubindi Farmers’ SACCO in Kashari North provides agricultural loans, school fees loans, commercial loans and boda-boda loans. It was ranked among the best SACCOs with no external financial support in the region.
Moses Asiimwe, the SACCO manager, encouraged other cooperatives to work together to stop multiple borrowing and defaulting.
“Defaulting on repayment is a common practice caused by multiple borrowing, which must be critically ironed out. If there’s cooperation among SACCOs within the same jurisdiction, we can easily track and stop multiple borrowers and reduce loan defaults,” he said.
He commended Rubindi Farmers’ SACCOs for employing more than 20 people who are all residents within its operational boundaries.
“People trust our SACCO so much and even our employees are recruited through the committees. The human resource receives applications and the vetting and approval is done by the board, meaning that we observe transparency, integrity and maximum respect within Rubindi Farmers’ SACCO,” Asiimwe said.
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