The Deputy Speaker of Parliament, Thomas Tayebwa has advised the leaders of the Parliamentary SACCO to establish their own bank in order to serve the wider public.
Tayebwa who was presiding over the 19th Annual General Meeting [AGM] of the SACCO on Friday, said establishing a bank would bring in more money on the account of a solid assets base.
“Looking at this SACCO with assets of around Shs 67 billion, this is strong and I think next year we need to look at starting a commercial bank. I have seen some of the banks where you are fixing money they don’t have that money. Why can’t we make it and then each one of us shall have a sense of ownership?” Tayebwa advised.
This follows the presentation of the SACCO board chairperson, Robert Migadde Ndugwa’s report, detailing the growth of the assets.
Migadde explained that total assets of the SACCO grew from Shs 47.3bln to 67.5bln as of June 30, 2023.
The SACCO has also recorded an increase in the loan uptake from Shs 25.34bln to Shs 33.44bln as of June 30, 2023, with Pamela Kamugo, Woman Member of Parliament Budaka district awarded as the best borrower while Tororo South MP, Fredrick Angura scooped the best saver award.
He also reported that the SACCO’s savings are now Shs 47.58bln up from Shs 29bln in 2022, while the loans stand at Shs 33bln from Shs 25bln in 2022.
“That credit goes to you MPs, former MPs and staff. The fund has continued to grow,” Migadde said.
The report shows the SACCO also accumulated Shs 2.1 bln in capital reserves from the tax waiver savings after the cooperative led all SACCOs to obtain a tax waiver in 2018.
Migadde said the SACCO continues to have surplus cash which the board has been investing in fixed deposits with commercial banks, unit trusts and also in land.
“As of June 30, 2023, the SACCO had 12bln invested in fixed deposits, Shs 10bln in unit trusts and Shs 8.2bln in land at Namwabula on Mityana Road,Mpigi district,” he said.
Further, Tayebwa applauded the SACCO management for the job well-done and its strategic decision to invest in long term ventures like treasury bonds because they return more income on interests.
A fixed deposit is a tenured deposit account provided by banks or non-bank financial institutions which provides investors a higher rate of interest than a regular savings account, until the given maturity date.
Tayebwa reiterated that: “I know how the markets have been performing and I am glad you are opening up to long term investments and it is one thing which I have been telling you because when I see you investing in fixed deposits and yet these people are putting money in long term treasury bonds, then I was asking myself, what are you doing?”
Disclosing that most of his savings on emoluments from parliament are invested in the Parliamentary SACCO, Taybwa encouraged fellow legislators to save a significant percentage of their monthly income in order to cater for financial shocks in the future, adding that this was the purpose of the SACCO.
“I have seen in Parliament the issue of saving culture is bad because of the pressure we have in our constituencies. You see someone who is earning almost 10 percent of your salary is growing and you are not growing,” he said, adding that “I think it is a problem of many Ugandans who spend much more than they earn. The issue is all about us managing our appetite for risks. Let’s save at least 20 percent of our earnings and secure the future.”
Migadde told the members who attended the AGM that the SACCO has positioned itself on an international level by subscribing to the African Confederation of Cooperative Savings and Credit Association [ACCOSCA], an opportunity that has opened gates for more training in financial management.
“At the continental level the SACCO is now an associate member of ACCOSCA. This year our SACCO was represented in Zimbabwe and Botswana where we received training in SACCO management,” Migadde said.
The board chairperson National Social Security Fund [NSSF], Peter Kimbowa urged the SACCO leadership on mobilising funding from international organisations to ensure sustainability.
“The world of sustainable financing last year had Euros 500bln to support entities like yours that are into sustainability. Africa only got eight per cent of that; Why? We do not know how to write proposals and right now, we do not even know that this SACCO can get money from outside members,” said Kimbowa.
The SACCO boasts of a membership of 1,504 which includes incumbent MPs, former MPs and staff of Parliament.
The SACCO boss also revealed they are already planning on embarking on Corporate Social Responsibility [CSR] with hope to identify and support some needy families across the country.
The SACCO’s AGM meeting passed a resolution to write off a loan of up to Shs 421.3 million taken by former members who have since passed on, including former Speaker of Parliament Jacob Oulanyah who had a loan of about Shs 294.9bln.
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