Kampala, Uganda: The Uganda Peoples Defense Forces Savings and credit scheme – Wazalendo has announced it is going to embark on an impact assessment of all loans given out to its members since the SACCO’s inception, as a way of appraising the SACCO’s performance in regard to uplifting the social welfare of its members.
In an interview with theCooperator, Wazalendo’s board chairperson Maj.Gen.Sam Kavuma noted that since its inception in 2005, Wazalendo has disbursed over Shs.890billion to its members and that it was now time to take stock of what the money had done.
“In Wazalendo, we don’t make losses because we lend only to our members in active service. But now we want to find out if our money is making a positive difference in our members’ lives, and if not, what we can do about it going forward. That is why we are thinking of carrying out an evaluation impact assessment on the cumulative loans given out so far since 2007,” he explained.
Kavuma said the army will conduct the evaluation exercise in even the remotest of villages, wherever its officers come from. He said he has always advised members who borrow money to desist from investing their monies on “things that appear nice, cost millions of money but don’t make any returns.”
“You find someone buying a very expensive phone at say shs.3million, yet if that person invested the 3million in goats, he would have purchased at least 30 goats. Considering that a goat produces twice in a year, he would have 90 goats in a year and over 900 goats in 10 years. Would that person still be poor?” he asked, rhetorically.
He warned members against investing their borrowed money on liabilities, noting that the essence of borrowing should be to invest in things that have long-term returns. “A member borrows money and buys a car and even before he drives it, he is told the tyres are old, he needs new ones, he needs fuel, third party and so on. The car starts consuming your money even before you reach home. The car may even be stolen before you reach home as you boast to friends in a bar,” he said.
He urged members to invest in assets – things that have returns, like poultry, cows, goats piggery. “Invest in things that pay you back, either daily, weekly, monthly or annually,” he advised.
With a membership of over 67,000 members, Wazalendo remains Uganda’s biggest and arguably most successful SACCO. It is also the 6th biggest on the continent.
At its annual General Meeting last year held in Lugazi, the SACCO announced it had made a profit of shs.31.1 billion that was given out as dividends to its members.
“We can’t say we don’t have issues as Wazalendo. But as a savings scheme we are doing well, save for issues such as deaths, desertions, and retirements that are unavoidable,” said Kavuma.
He explained that when someone dies, deserts or retires, it affects the SACCO’s numbers not only in terms of membership size, but also in savings. “When someone retires he/she gets all his shares and savings and goes away and that is automatically a reduction. When they desert, it means we’ve lost out on savings. And when a member dies, all savings and shares are offset. All these affect the growth of the scheme,” he noted.
As a buffer against such eventualities, Wazalendo has put in place a Loan Protection Fund (LPF) that acts us its internal insurance. “Any member who gets a loan is charged 2% to cater for deaths and desertions. That is why when a member dies or deserts, we don’t follow his/her family,” Kavuma explained.