Stanbic increases ceiling for unsecured SACCO loans to Shs 4bln

KAMPALA, November 20, 2024 – Stanbic Bank has raised the ceiling for unsecured SACCO loans to Shs 4 billion, up from the previous limit of Shs 200 million, with an interest rate of 10 percent.

The bank’s Chief Executive, Francis Karuhanga, announced this morning that the decision to increase the SACCO loan offering was in response to feedback from several engagements with cooperative leaders across the country, as well as the growing demand for affordable financial solutions.

Karuhanga explained that the increased loan limit is expected to empower cooperatives, particularly those led by women and youth, by giving them access to financial resources that will enhance operational efficiency and contribute to the socio-economic transformation of both their members and the country.

“We believe that by doing this, we are not only creating opportunities for our customers but also transforming the lives of people who we would otherwise not reach as a bank,” he said.

According to available statistics, banks in Uganda serve approximately five million people, whereas Savings and Credit Cooperative Organisations [SACCOs] reach nearly 20 million people across various demographics.

“Therefore, it is crucial for us, as the leading drivers of Uganda’s economic development, to provide access to inclusive and affordable financing solutions,” Karuhanga added.

James Junguru, the Manager in charge of SACCOs at Stanbic, noted that the new ceiling allows for substantial enhancements in loan distributions, enabling larger projects and financial turnarounds for cooperatives, which play a vital role in the livelihoods of many Ugandans.

“Stanbic Bank has already disbursed over Shs 200 billion and is currently offering comprehensive support and resources to help SACCO members understand the new opportunities available to them. These offerings include investment alternatives like treasury bills and unit trusts through our sister company, SBG Securities, affordable insurance packages for their loans and assets, and an opportunity to integrate their systems into our Flexipay platform, which simplifies collections, distribution, and record management,” Junguru explained.

Tunde Thorpe, Stanbic Bank’s Head of Transactional Banking, described the move as part of the bank’s ongoing efforts to give back to the community, offering innovative solutions that best meet the needs of its customers.

“We know this initiative comes at a crucial time as the country continues its economic recovery following the pandemic. Our increased loan limit is designed to encourage investment, stimulate economic activity, and ultimately drive growth within local communities,” Thorpe said.

Augustine Tamale, Chairman of Vision Group SACCO, expressed appreciation for the new loan ceiling, stating that it would significantly increase the impact of SACCOs on their members’ lives and contribute to the economic transformation of the country.

“This move is very important because when our members save money, they expect to be assisted in times of need, up to three times their total savings. As SACCO leaders, we are always looking for investment opportunities to help our groups grow their assets and pay dividends,” said Tamale. “However, sometimes members may request more funds when we have recently invested, for example, in real estate, where the money is not immediately accessible. Therefore, an intervention like increasing our credit ceiling will help us serve our customers better.”

Data indicates that Uganda has at least 33,000 registered SACCO groups, including those under the Parish Development Model [PDM] and Village Savings and Loan Associations [VSLAs].

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