Loan defaulters blamed for poor performance of Kyamuhunga People’s SACCO
SACCO managers had targeted a net surplus of Shs 5 billion for the year 2024. However, the SACCO only earned a net profit of Shs 1.98 billion, a result Kahiigi attributed to poor loan recovery
BUSHENYI April 9, 2025 – The Board Chairman of Kyamuhunga People’s SACCO [KYAPS] in Bushenyi district, Paul Turyamureeba Kahiigi, has urged members to ensure they repay their loans promptly if their organisation is to thrive.
He made this call during the recent Annual General Meeting [AGM] held at Kyamuhunga Catholic Parish Hall in Kyamuhunga Town Council, Bushenyi district.
Kahiigi explained that the SACCO managers had targeted a net surplus of Shs 5 billion for the year 2024. However, the SACCO only earned a net profit of Shs 1.98 billion, a result Kahiigi attributed to poor loan recovery.
“We expected to make a net surplus of Shs 5 billion in 2024, but we only managed to make a net profit of Shs 1.98 billion because loan recovery was poor, resulting in low dividends for the members,” Kahiigi said.
Of the Shs 1,700 paid to each member as dividends, Shs 500 was reinvested into their shares, while Shs 1,200 was given as a take-home package. This decision, however, did not sit well with some delegates at the AGM.
Kahiigi pointed out that most of their members are tea growers, and the drop in tea prices had made it difficult for them to repay the loans they had taken from the SACCO.
According to Kahiigi, SACCO members who had taken out loans to invest in their tea plantations suffered losses as tea prices sharply declined in 2024, forcing many farmers to abandon their tea estates.
Kahiigi further stated that bad debtors, including political leaders, were posing a threat to the SACCO’s operations.
He urged delegates at the AGM to suggest harsher methods of loan recovery. “We have some people who have defaulted for over five years now, and we have about Shs 2 billion stuck in loans. The question is whether the external financiers will continue to provide us with more money. If we become lenient, the amount held by the defaulters could increase to Shs 6 billion, and we would collapse,” he said.
During the AGM, over 500 delegates confirmed the re-election of Paul Kahiigi Turyamureeba, Rev. Fr. Ayebare Mukasa Barekye, and Angella Musiimenta to lead the SACCO for the next four years.
The newly elected board members include: Turyamureeba Paul Kahiigi [Chairman], Fr. Ayebare Mukasa Barekye [Treasurer], Musiimenta Angella [Member], Kyokunda Christine [Member], Ninsiima Mary [Member], Edgar Tumugabirwe Ndyakira [Member], and Alex Bangyereza [Member].
Kahiigi, who was re-elected as Board Chairman, thanked the delegates, stating that under his leadership, the SACCO had made significant progress.
“When I joined, KYAPS had never made a net profit of Shs 1 billion, but over the past four years, we have achieved a lot. We introduced board and staff policies, acquired three SACCO vehicles to ease transport for our staff, and constructed a head office. Our share capital has grown from Shs 6 billion to approximately Shs 10 billion. Membership has increased from fewer than 30,000 to over 50,000. Based on what we have achieved in the last four years, members felt it appropriate to re-elect me as Chairman for another four years,” he noted.
Kahiigi also appealed to the government to address the issue of multiple regulations, stating that KYAPS wishes to remain operating as a SACCO rather than transitioning to a Microfinance Deposit-Taking Institution [MDI].
“The issue of suggesting that KYAPS should become an MDI as it grows is something I don’t support. We, as SACCOs, consider ourselves one family, and we need to support each other to grow,” he said.
“We are regulated by the Bank of Uganda, the Registrar of Cooperatives, and the Uganda Microfinance Regulatory Authority [UMRA] under the Ministry of Finance, Planning and Economic Development. However, we would prefer a single regulatory body,” Kahiigi added.
He urged the Ugandan government to look to Kenya, where the cooperative movement is more vibrant, and all SACCOs are regulated by a single body, the SACCO Societies Regulatory Authority [SASRA].
Kahiigi also pledged his full commitment to ensuring that KYAPS increases its liquidity to avoid external borrowing, which hinders both the SACCO’s and its members’ growth.
Robert Mpakiibi, Assistant Commissioner and Registrar of Cooperatives who was the Chief Guest at the AGM challenged SACCOs to comply with the existing regulations while the government works to harmonise them.
“We are aware of the regulatory challenges, and I have been following discussions, especially among the leadership of UCSCU, regarding regulations. I want to reassure you that the government is working hard to harmonise these regulations. My humble appeal is that, as we work on harmonisation, we should continue to comply with the current laws,” Mpakiibi said.
He also pledged to support the Microfinance Support Centre [MSC] in speeding up the loan issuance process to SACCOs and encouraged members to buy more shares to improve the SACCO’s liquidity, which in turn would increase dividends.
On his part, John Bosco Atwijukire, General Manager of KYAPS, appealed to members to support their SACCO by saving more, applying for loans, and repaying the loans on time.
“I urge the members to remain loyal to KYAPS because a SACCO cannot survive without its members. Many SACCOs are emerging, but there is no reason to leave your parent SACCO for a new one when you can get the best, most affordable services right here. Our loan products range from Shs 50,000 to Shs 50 million, meaning we can serve every member,” he said.
Atwijukire also highlighted the importance of having succession plans for leadership to ensure smooth transitions and the continued growth of the SACCO sector.
The 26th AGM concluded with the presentation of awards to three cows and 12 goats to the best shareholders and savers at Kyamuhunga People’s SACCO.
Background
Kyamuhunga People’s Savings and Credit Development Association Limited [KYAPS] initially started as a company limited by shares in 1998. It later changed its legal status to a cooperative society in 2004, under registration number 7053.
KYAPS, with 120 staff currently, began with 15 members and Shs 3 million but has since grown to 52,666 members. It now boasts a total share capital of Shs 9.75 billion, total savings of Shs 13.77bln, and a loan portfolio of Shs 39.39bln. The SACCO generated a net surplus of Shs 1.98bln and a cumulative loan disbursement of Shs 275.88bln.
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