Minister asks SACCOs to charge low interest rates

KAMPALA– Savings and Credit Cooperatives Organisations [SACCOs] in the country must not charge members above 18 percent interest on loans taken, Haruna Kasolo Kyeyune, the State Minister for Microfinance has said.

Minister Kasolo said his ministry has received complaints that some of the SACCO managers charge their members as high as 25 percent on loans, adding that such high interest impedes access to cheap loans in the country.

The minister made the call while presiding over the launch of Nabugabo Spare Parts Dealers SACCO offices days ago.

He warned SACCOs managers to desist from making abnormal profits on loans to members, saying that the aim of the SACCOs is to help fight poverty in the country.

He said lack of collateral has prevented many Ugandans from accessing bank credit to do business. “Many Ugandans want to work…However, when they go to banking institutions for loans, they are asked to present collateral security, which they do not have,” he said.

He said this is the reason why the government supports SACCOs with seed capital so that they support their members, adding only 19 percent of Uganda’s population has bank accounts.

The minister said government has not done a census of the SACCOs in the country because new ones are formed every day.

He also warned SACCOs managers and leaders who connive to steal members’ money, saying that government put in place Uganda Microfinance Regulatory Authority [UMRA], Four Tier Microfinance Institutions and Money Lenders Act to make Ugandans have confidence and save with the SACCOs.

Nabugabo Spare Parts Dealers SACCO Chairperson Tony Kakande said his organisation would help idle youth in the areas of Kissekka market and Nabugabo to set up businesses, having received Shs400 from the Microfinance Support Centre [MSC] to finance the businesses of 1,158 members.

Gibson Ainamaani, Head of Business Development Services at MSC said they gave the group the loan at 8 percent per annum, arguing leaders to lend out the money at manageable interest rates so that it multiplies quickly.

Col. Ronald Rubaale, Coordinator of Operation Wealth Creation in the Ministry of Finance urged the group to recruit more members and be disciplined, saying SACCOs grow with the rise in member numbers.

He appointed out that Wazalendo SACCO is the biggest SACCO in Uganda because of its members, who he said are disciplined as well.

“Numbers accumulate money and savings to lend out whereas discipline is about saving and paying back the borrowed money in time,” he said.

NO salaries for PDM committee members

Meanwhile the Minister of Local Government Raphael Magyezi has said no salary will be paid to members of Parish Development Model [PDM] Committees, saying the members will only be given some allowances for transport and drinking water.

According to implementation guidelines for the PDM, Parish Development Committees [PDCs] have 11 roles to play.  One of the roles is to mobilise, sensitise and create awareness on PDM programmes to the communities.

Among others, the PDCs are also tasked with the role of identifying the needs and priorities of the parishes or wards, as well as preparation of parish/ward action plans, budgets, and reports for PDM.

PDCs consist of seven members; Chairperson LCII, Parish Chief, Chairperson, Women Council, Chairperson, Youth Council, Chairperson, Disability Council, Chairperson of NRM at the parish level, and Opinion leader / elderly.

Through PDM, government wants to push 3.5 million Ugandan households out of subsistence farming to the money economy.

Government hopes to spend Shs500mln on each of the 10,594 parishes for five financial years, each parish taking Shs 100 mln annually, with the PDM SACCOs tasked to lend the money to groups at 6 percent.

According to the distribution plan, 30 percent of the money is earmarked for women, youth [30 percent], and elderly [10 percent] while 20 percent will go to men and others.

https://thecooperator.news/bribery-and-ghost-beneficiaries-discovered-in-emyooga-saccos-scam/

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