Cooperatives & CommunitiesDevelopmentEast AfricaFinance & BankingNews

Poor management to blame for collapsing Lango SACCOs-Expert

Savings and Credit Cooperative Organizations (Saccos) in Lango Sub-region are collapsing due to mismanagement, experts have said.

Speaking during a 5-day training of Acan-pe-Kun SACCO members on Thursday, the Chief Executive Officer of Ngetta Tropical Holdings, Paul Omara, said that, so far, five prominent SACCOs in Lango have collapsed in the past two years, and more others are on the verge of failure.

Those that have collapsed include Abutabera Youth SACCO in Apac district, Aloi Women SACCO in Alebtong district, and Dokolo United SACCO Limited in Dokolo district, among others.

Some of the co-operatives have also failed to repay the Shs 198m that they borrowed from the Government through the Microfinance Support Centre, while members are in court seeking a refund of their savings and shares in billions of shillings.

But Omara, an Economist and former banker pointed out poor management, political influence and conflicts between the SACCO boards and managers as major issues tearing SACCOs apart.

He noted that oftentimes the SACCO Managers are responsible for their collapse because they embezzle members’ money.

“When you are electing board members, you choose the uneducated and then employ well-educated managers and other staff who manipulate the system and steal all the money. The board cannot supervise them because they do not know anything,” Omara argued.

Philip Otim, the Apac District Commercial Officer concurred with Omara’s diagnosis, adding in such cases it is difficult to prosecute the culprits.

“There are many managers who have run off with cooperatives’ money in this district. It is hard to prosecute them because they manipulate the board, banking on the members’ limited education. There are so many such cases in court,” Otim said.

Acan-pe-Kun SACCO Limited was opened in 2011 by farmers in Chegere Sub-county. The SACCO, which has a loan portfolio of Shs 975m, operates on its own piece of land and office premises at Ololango trading centre, Chegere, Apac district.

Allan Okii, the cooperative’s Chairperson, says they have 473 members who are committed to the aspirations of the SACCO. 

He appealed to the government to provide cooperative societies with low-interest agricultural loans to enhance their production and alleviate poverty.

“The major goal of SACCOs is to promote access to finance, especially among the poor who are actively engaged in any economic activity. The government should extend soft loans to SACCOs with the interest of as low as 1 per cent to help eradicate poverty,” he said.

In June last year, the Prime Minister, Dr Ruhakana Rugunda, said the government was considering strengthening SACCOs in rural areas in order to fight household poverty.

“We are studying how to strengthen the SACCOs because the Youth Livelihood Programme (YLP) and Uganda Women Entrepreneurship Programme (UWEP) as measures to reduce poverty have made little impact,” Dr Rugunda said.

The Prime Minister said the YLP and UWEP funds had been abused to the extent that the beneficiaries had failed to repay the money yet they are supposed to be revolving funds.

He added that despite the government injecting billions of funds into the programmes, little has been achieved on the ground.

Buy your copy of thecooperator magazine from one of our  country- wide vending points or an e-copy on emag.thecooperator.news

Related Articles

Back to top button