SHEEMA, April 14, 2025 – The Chairman of Shuuku SACCO Limited, Stephen Bongonzya, has warned board members and the wider membership against loan defaults, stressing that such practices are threatening the survival of the cooperative.
Speaking during the 26th Annual General Meeting [AGM] recently, Bongonzya criticised some board members for failing to repay their loans, warning that continued financial indiscipline would erode trust with financiers and endanger the SACCO’s future.
“I have worked with many people, but I have never encountered such a regime. It pains me deeply. As a senior, I restrain myself from shedding tears,” Bongonzya said during the meeting, which also included elections for a new board.
Among those voted out was Vice Chairman Levi Bugembe, replaced by Benon Mugarura, a former Loans Committee Chairman.
Bongonzya revealed that loan defaults by board members had undermined relationships with financial partners. “I spend months convincing financiers to support us, only for them to refuse when they discover the SACCO’s money is being mismanaged. They say, ‘You, the master of banking in this country, can’t control your own people?” he said.
He added that due to the risk associated with poor loan recovery, financiers are now charging higher interest rates. “Where we should be receiving funds at 9–10 percent, we’re getting them at 20 percent. Ultimately, it’s our members who bear the burden.”
The Chairman condemned the lack of unity among former board members, alleging that some leaked internal discussions and held parallel meetings. “By the time I reach home after a board meeting, people in bars already know everything discussed,” he said.
Bongonzya urged members to vote wisely and avoid electing loan defaulters to leadership positions. “If your loan has been overdue for more than 30 days, the bylaws don’t allow you to stand for office,” he reminded the members.
Looking ahead, Bongonzya said plans are underway to introduce agricultural insurance, particularly for farmers affected by climate change. “Most of our members depend on nature. Without farm insurance, climate shocks make it hard for them to repay loans, affecting our overall financial health,” he said.
He revealed that the SACCO has already invested over Shs 1 billion in coffee production. “In one village alone, we have sunk Shs 300 million. A single calamity could wipe that out. Insurance is now essential.”
Bongonzya also shared that the SACCO’s five-year strategic plan had been updated in line with the United Nations Sustainable Development Goals and Uganda’s Fourth National Development Plan [2025/26–2029/30]. The plan focuses on increasing profitability, efficiency, and environmental sustainability.
He emphasised the need to diversify income streams beyond loan interest. “Our dividends are low because we rely solely on loans. If loan repayments falter, so does our income. We are now considering setting up subsidiary ventures, like land trading,’’ he said.
Kafurembe Asasira, Sheema District Commercial Officer, called for the enforcement of disciplinary measures as outlined in the SACCO bylaws. “Article 12 allows for the suspension of any board member acting against the interests of the SACCO, including failure to repay loans. You don’t need to wait for the AGM,” he said, citing a case of a member who defaulted on Shs 90,000 while still receiving allowances.
Aggrey Atekyeka, Principal Commercial Officer for Bushenyi-Ishaka, warned SACCOs against using suspense accounts, stating they often lead to fraud. “Many SACCOs collapse due to poor governance, loan default, and misuse of suspense accounts,” he noted.
He revealed that recent forensic audits indicate eight SACCOs in Bushenyi district had collapsed due to mismanagement. These include Nyakabirizi People’s SACCO, Kyeitembe People’s SACCO, Kambuzi Farmers’ SACCO, and others. He called on Shuuku SACCO to strengthen governance and accountability measures to avoid a similar fate.
https://thecooperator.news/shuuku-sacco-elects-new-leaders-at-26th-agm/
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