Bob Bariyo Barigye, the Commissioner for Cooperative Development and acting Registrar of Cooperative Societies has called for good governance if cooperatives are to thrive.
Barigye made the remarks Friday while officiating at the Annual General Meeting (AGM) for Mwizi Co-operative, Savings and Credit Society Ltd at Kabura town council in Mwizi Sub County.
The AGM was attended by 400 members from Ngoma zone, Bushwere, Ryamiyonga, Rukarabo, Kigaga and branches of Bugamba, Isingiro, Nyamuyanja and Rwoho.
During the same meeting, the formidable Mwizi SACCO, which gone three years without holding Annual General Meetings due to corrupt tendencies and, more recently, the novel COVID-19 pandemic, elected a new board committee to run its affairs for the next four years per the amended 2019 Cooperative Act.
A 2019 forensic audit indicated that Mwizi SACCO had made a loss of Shs 411m, and then Board Chairperson, Evarist Mujuni, and Evans Kabambo, the Chairperson supervisory committee were arrested and subjected to investigations by the anti-corruption unit over the missing SACCO funds.
It is against this background that the Registrar of Cooperatives warned the delegates to elect competent leaders who will push Mwizi SACCO forward.
“The new board must ensure good governance which includes having credible leadership by people with integrity and implementing good management practices,” Barigye emphasized.
Barigye expressed hope that the new leadership would guarantee a bright future for Mwizi SACCO.
“Giving the turbulence it has had before, the SACCO is now on track. But it can only keep on track if the board is not only not selfish but also practices good corporate governance.”
He added that a strong foundation for any cooperative starts with members who are clear on their objectives for joining it.
“For example, your SACCO’s philosophy is savings and credit so members must be ready to save and save regularly and to access credit which they must repay in time. In short, the foundation of a cooperative is built from the capital base of course which involves the members’ deep volumes of savings and a good repayment rate,” he explained.
He further advised the SACCO not to be afraid of closing off some of its branches if they are not performing to the expectations.
“In future, if those branches can’t break even, they are better off being closed, just like commercial banks do with branches that don’t perform well.”
Poor loan appraisal killing SACCOs
For his part, Emmy Kateera Turyabagyenyi, the Resident District Commissioner (RDC) Rwampara, called for prudence in appraising individual loan applications in order to avoid lending the SACCO’s money to people who will not be able to repay it.
He attributed cooperatives’ collapse to bad appraisals by loan officers while giving out loans to members.
Turyabagyenyi noted that some loan officers give loans to people without putting into consideration what people own and their addresses in case they default or become bankrupt.
“Poor appraisal of loans applicants by Loans Officers has led to the collapse of many cooperatives,” he warned, stressing that a proper appraisal should take into consideration the applicant’s assets and carefully record their addresses.
“Otherwise in no time you will find that they have gone bankrupt, or you cannot trace them, and it would be very hard for the SACCO to recover its money.”
According to its General Manager, Aaron Ntegyerize, Mwizi SACCO, which was started in 2001, currently has10,000 members with four authorized operational branches of Nyamuyanja, Isingiro, Bugamba branch, and the Mwizi SACCO head. It also has an outreach in Rwoho town council, Ntungamo district.
He revealed that the SACCO’s loan portfolio increased from Shs 4 bn to Shs 5.16 bn last year, with a target of making Shs 6.5 bn by the end of 2021.
“Savings have continued to grow at 1.5 billion shillings last year, and we are targeting more than 2.1 billion this year. So far we have 10, 000 shareholders with a total share capital of 1.58 billion shillings, but we expect to raise it to 1.7 billion by the end of this year according to our business plan,” Ntegyerize said.
Wilson Mutabazi, the newly elected board Chairperson pledged to work hard to uplift the standards of Mwizi SACCO, and implement a number of projects to improve household conditions for members of the community.
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