By Sadab Kitatta Kaaya, The Observer
Depositors of Taala ya Mawogola (light of Mawogola) Microfinance Savings and Cooperative Society Ltd in Sembabule are in the dark over what their future holds after their investment fund holders made off with more than Shs 600m of savings.
Police is looking for Ibrahim Were, the society’s general manager, board chairman Simon Peter Ddungu and secretary to the board Dez Byuma in relation to the disappearance of the funds. In the meantime, the officer in charge of Mateete Police station AIP Johnson Muhwereza and the his criminal investigations chief detective Sergeant Muhammad Twesigye have been arrested for allegedly aiding the Microfinance’s bosses to make off with the loot.
Headquartered at Mateete township in Sembabule district, Taala ya Mawogola Microfinance had established itself as one of the leading microfinance institutions in the Greater Masaka area with a loan book of more than Shs1bn. The company was established at the close of 2005 after the collapse of the prominent Dr Ahmed Jazayeri’s FSA [Financial Services Association] International Uganda Ltd.
The company was then created with Foreign Affairs minister Sam Kutesa as its patron. It soon opened branches in Sembabule and Bukomansimbi town councils. While on a Bonna Bagaggawale – a government programme to make all households financially sustainable – tour of Sembabule district last year, President Museveni visited the microfinance’s head office and recommended it to benefit from the Bonna Bagaggawale funds.
The microfinance grew in leaps and bounds as new depositors joined while more credit was churned out. However, things started going wrong around May with rumours of financial mismanagement.
“There was an Annual General Meeting at Mateete during which members raised queries about suspected irregular financial transactions. They resolved that the general manager steps aside to allow for investigations,” Sembabule DPC Abdallah Kitimbo told The Observer recently. When this resolution was passed, the GM Ibrahim Were is reported to have asked for some time to prepare a report before he could leave office.
“His handover report was without an audit report,” Kitimbo told The Observer, something odd regarding such cases.
Now, theories abound as to how the money was stolen. Some say the money was swindled in transit to the microfinance’s account in one of the major banks in Masaka town, while another suggests that the board used to sign blank cheques and the general manager would fill in any amount before withdrawing the money.
“The bank (microfinance) is headed by Minister Sam Kutesa’s men who consider themselves untouchable. This is the reason we have been robbed,” a depositor who asked not to be named said.
Now the cops want Ddungu and Byuma to explain their role in the disappearance of the funds. But both men were influential in the campaigns against area MP Theodore Sekikubo and former Sembabule chairman Herman Ssentongo – Kutesa’s nemeses in the district – during this year’s general elections.
The security committees of Sembabule and Bukomansimbi districts have since directed the Police to seal off the microfinance’s branches as the Microfinance Support Centre carries out an audit.
“Since all microfinance institutions in the country are under the Microfinance Support Centre, we asked them to do the audit before we can move on with our investigations,” Kitimbo said.
Also on the Police’s wanted list is the Sembabule district Commercial Officer Simon Peter Ddungu, suspected to have detected the financial irregularities but failed to take immediate action.
“He is the immediate supervisor of all SACCOs in the district; there is no way he could have not realized this problem in time,” Kitimbo added.
By Nathan Were, New Vision
THE Budget Committee of Parliament is recommending that the Government owned Microfinance Support Centre (MSC) operations be suspended.
The recommendation follows refusal by the same committee to approve a 4.96b to support operations at the centre.
MSC, as the lead agency in the rural financial services strategy and a key player of the Government Prosperity for All, has over the years successfully developed a formidable rural financial services infrastructure.
It has achieved through support to rural financial institutions, popularly known as Savings and Credit Cooperative Societies (SACCOs), wholesale lending and business advisory services.
With 30% of Ugandans excluded from the financial service systems and 40% serviced by the informal financial service providers (SACCOs, MFIs), winding up operations of MSC would mean that even the little that has been achieved will be eroded. The centre extends wholesale credit to SACCOs for onward lending to active and productive Ugandans engaged in small scale agriculture and petty trade. These small loans are what have enabled many rural Ugandans curve out a living.
A typical SACCO funds its loan portfolio with 80% of borrowed funds. These institutions can only mobilise 20% in form of savings to finance their lending operations. 80% of the SACCOs loan portfolio is borrowed from the Microfinance Support Centre.
If SACCOs cannot access credit for onward lending to their members, and considering that the savings volumes in the SACCOs cannot meet credit needs of the borrowers, 70% of the existing SACCOs will collapse in one year.
The other 30% will survive but not beyond the next year.
One may wonder why the collapse of the SACCOs is a big deal. With only 20% of the population served by the formal financial institutions, majority of Ugandans are not reached by the formal institutions and their only hope to access financial services is the informal financial systems.
A strong rural financial system is key in delivering on the development of the rural local economy. Micro and small entrepreneurs without collateral securities and records required by conventional financial systems have a chance to oil their small businesses through financial services supplied by informal financial service providers.
Through these localised financial systems, they are able to grow their credit history and progressively become bankable and finally enter the formal financial arena.
MSC as a lead agency in this cause has ensured that institutions exist to create rural entrepreneurs.
To date, the centre has cumulatively disbursed sh82.5b to; SACCOs (sh50.9b); Unions (sh7b); MFIs (sh19.6b); SMEs (sh4.3b); and other forms of co-operatives (sh0.355b). The repayment rate stands at 93.17%.
These funds have been disbursed to 1,129 institutions, SACCOs (918); MFIs (73); SMEs (40); Unions (07); other co-operatives (81).
It is this support to the rural financial fabric that has brought down the level of financial exclusion from 62% in the 2007 to under 30% in 2010 according to a FINSOPE report. This contribution cannot be under-estimated.
Although there have been issues of mismanagement, currently under investigation by the Inspector General of Government, the achievements of the centre cannot be overlooked.
What the Government needs to do is to formulate a legal framework that should see MSC operate as a statutory body, appoint a board of professionals and insulate the company operations from politics.
We should clearly analyse the implications of the institution’s closure on the rural financial services infrastructure and the options available to support struggling small businesses benefiting from financial service offered by SACCOs.
The writer is a market and product specialist at the Microfinance Support Centre.
By Yasiin Mugerwa, Daily Monitor
After the IGG put former Vice President Speciosa Wandira Kazibwe on the spot over allegations of corruption at the government- owned Microfinance Support Centre, the Auditor General has also issued a damning report in which the top managers of the company are accused of mismanaging public funds.
The Auditor General found evidence highlighting how officials at MSC disbursed billions of shillings worth of loans outside the company credit policies. Mr John Muwanga, the Auditor General, has demanded immediate action on unidentified culprits.
The AG has also questioned the manner of giveaway of money by President Museveni to traders at St Balikuddembe, the former Owino market, when it was gutted by fire in 2009. “The company disbursed a non-interest bearing loan to the Park Yard SACCO of Shs1 billion contrary to the MSC credit granting policies and procedures which state that only start-up loans shall be disbursed interest free and the amount disbursed shall not exceed Shs10 million”. But the management told AG that the funds was received as per the presidential pledge to the traders on an interest free loan, adding that the case was exceptional.
Last month, Finance Minister Maria Kiwanuka suspended Ms Kazibwe as board chairperson of the MSC along with another top official until investigations into their alleged mismanagement are complete. Ms Kazibwe and other officials are accused of diverting public funds for personal use. But Ms Kazibwe has since denied any wrongdoing.
The AG revealed that disbursement of non-interest loans above approved thresholds could result in significant loss of potential income. The AG said the loan disbursement policies should be followed and if need be, the policies and procedure should be amended to take into account special consideration loans.
While MSC’s write off policy requires that loan amounts outstanding for longer than 365 days should be written off, the company as at June 30, 2010, had loans outstanding for longer than 365 days of Shs.1.5 billion. This according to Mr Muwanga “implies that the gross loans being recognised by MSC are not a fair reflection of what is recoverable.” “We recommend that the MSC policy on write-offs be adhered to. Management should assess on a periodic basis, loan facilities that are due for write-off and present them to the Board of Directors for approval,” the AG report read in part.
Former MD Charles Byanyima yesterday declined to comment on the report; “I resigned from that institution but it is a public body and information is there. Just leave me alone.”
Efforts to contact the Assistant Commissioner Microfinance, Mr Henry Mbaguta, were futile despite repeated calls. However, management acknowledged that there was shortcomings in adherence to the policy and that a management paper on loans write-off is being reviewed and would be presented to the board in January 2011.
AG also noted that there were weaknesses in the financial statements close process. “There were some instances of double postings of loans and advances,” the AG said. For example a facility of Shs50 million was posted twice as Mutara Development SACCO and Mutara Savings and Credit Society. It was noted that the loan interest & principal receipts from the zonal offices for the periods July and August 2010 had not yet been posted to the system by September 2010.
Mr Muwanga said misposting of transactions could result in inaccurate financial reporting of the performance of the entity and root corruption in the system. A review of non-performing loan recoveries, indicated that “management has not been aggressive and there are many instances of delayed action (on people who borrow funds).
By Hussein Bogere, The Observer
Company disbursed Shs 3bn in three months
The Inspectorate of Government has asked former Vice President, Dr Speciosa N. Wandira, to respond to allegations of mismanaging the Microfinance Support Centre (MSC) through, among others, irregularly appointing a deputy executive director and misusing funds.
Wandira was known as Kazibwe when she was veep. MSC is a Uganda government enterprise incorporated in 2001 to manage its micro-credit programmes. The company is under the ministry of Finance, Planning and Economic Development. In a letter dated March 28, 2011, David Makumbi, on behalf of the Inspector General of Government (IGG), lists 12 allegations against Wandira, chairperson of the MSC board of directors.
Her woes appear to have stemmed from the suspension of Charles Byanyima, the executive director, allegedly to make it easier to divert money towards election campaigns in Busoga sub-region.
In a whistleblower’s memo titled State of Affairs at the Microfinance Support Centre Ltd, it is alleged that Wandira promised to guarantee the money personally and repay it when President Museveni fulfils a pledge of about Shs 20 billion to the Busoga People’s Forum, an organisation she reportedly heads.
When Byanyima resisted the move, Wandira reportedly sent him on a four-month leave. Between December 2010 and March 2011, the Microfinance Support Centre, according to its financial statement, a copy of which The Observer has seen, disbursed Shs 3.1 billion to 501 special interest groups. This period also marked the climax of the presidential and parliamentary election campaigns.
According to a source at the centre, whose offices are located on Windsor Crescent in Kololo, although it was indicated that the money was being dished out as loans to savings and credit cooperative organisations (SACCOs), it was meant to influence voters.
“Many of those cooperatives did not meet the minimum requirements,” said the source.
The replacement of Byanyima as executive director has also been controversial. It is alleged that Iggy Musaali Rwabukuku lacks the requisite academic qualifications and was irregularly recruited. Rwabukuku, a member of the board, reportedly served a probation period of only three months as deputy executive director, before he was confirmed as boss.
His appointment letter, however, written by Wandira, stated a probation period of six months. Following his confirmation, the board, chaired by Wandira, allegedly hurriedly amended the Human Resource manual to cover up the irregularities.
Describing himself as an accomplished banker with 23 years of management experience in finance, Rwabukuku declared his intention to fill the position of deputy executive director in a letter to Wandira, dated May 25, 2010.
“By this letter, I would like to inform you that when this position is offered to me, I shall then tender my resignation as a board member of the company (MSC),” Rwabukuku wrote. His formal application to the board bears the same date.
His CV, a copy of which The Observer has seen, shows that he obtained a Master of Business Administration from Kampala International University in November 2008. The resume, however, does not show whether or not he has a first degree, a matter that was pointed out by the interviewing panel.
Interviews for the position of deputy executive director were conducted on June 7, 2010. According to documents seen by The Observer, each of the three candidates (Wilson Wamatsembe, Asaph Muhanguzi and Rwabukuku) were required to make a presentation explaining the strategies for achieving the MSC’s vision and mission if appointed.
Wamatsembe emerged best candidate with 75.5%, followed by Rwabukuku with 65.75%, while Muhanguzi came third with 60.5%.
“Mr Wamatsembe has the required qualifications, experience and answered technical questions well. He is recommended as the best suitable candidate for the job,” the panel noted in its assessment and recommendations.
Of Rwabukuku who emerged second best candidate, the panel noted that he “may experience adjustment problems considering the fact that he is moving from the board level to operations.”
A member of the panel also noted “a conflict of interest for a sitting board member to appear for a job within the same company.”
Nevertheless, Wandira and her board went ahead and appointed Rwabukuku as deputy executive director on June 24, 2010. No formal explanation was given for the decision to bypass the best candidate.
“I am pleased to inform you that the Board of Directors of MSC has directed that you be offered the position of DED for a period of three years with a probation period of six months. The board is interested in you taking up the offer as soon as possible and, in any case, not later than July 1, 2010,” she wrote.
On July 1, 2010, Rwabukuku wrote an acceptance letter, saying he hoped to “become the face and force of change in the organisation and provide the expertise and innovation for the attainment of the company vision, mission and goals in line with the government’s Prosperity for All programme.”
Besides, the whistleblower reported to the IGG that Wandira draws Shs 500,000 as allowance everyday she steps into MSC, even when she is there to check her personal mail or do private work.
Wandira is also accused of borrowing money from small SACCOS and not paying back. The whistleblower cites Dundu SACCO from which she reportedly borrowed Shs 3m that was never repaid. The whistleblower further alleges that Wandira manages MSC like her personal shop and directs things to be done her way.
The IGG letter asks the former vice president to defend herself against these allegations. When contacted recently, Rwabukuku sounded unbothered.
“You better contact my chairperson (Wandira); I am tired of that thing. I don’t think a newspaper should be concerned with the workings of the company. If you don’t have news, you should look elsewhere,” he told this writer.
Similarly, Wandira was dismissive.
“I am not an employee of MSC. I don’t care, because I know who I am. I don’t care what people say, because I know I’m doing the right thing. You go to the MSC and find out whether I sit there everyday,” she said.
By Faridah Kulabako, Daily Monitor Uganda -
Many Ugandans have borrowed small loans of as little as Shs50, 000 to finance small projects and work their way out of poverty. You might think of Shs50, 000 as loose change to buy onions and tomatoes. But to someone else, that could mean the start of a sustainable business.
Realising they had been ignored by commercial banks that considered them not credit worthy, the poor, especially women, opted to form Savings and Credit Cooperative Organisations (Saccos) to save and borrow money. Saccos owe their continued existence to proper understanding of the micro lending business, their customers’ needs and the risks involved in trying to behave like conventional banks.
Today, microcredit is an effective tool used to fight poverty and enhance development in many poor countries across the world through supporting and putting the poor themselves at the forefront.
In an interview with Smart Money, Mr Charles Byanyima, the executive director Microfinance Support Centre (MSC) said microcredit is a critical factor of growth for poor societies where business activities are largely informal and access to credit is restricted. To boost Saccos capacity, increase access to finances and stimulate rural productivity, the government, through the Microfinance Support Centre recently launched a Shs60.6 billion ($27 million).
The Rural Income and Employment Enhancement Project (RIEEP), which is jointly funded by the African Development Bank, the Islamic Development Bank and Bank of Uganda seeks to increase access to credit services to about 1.4 million rural poor.
AfDB contributed about Shs33.6 billion ($15 million) to the pool; IDB contributed about Shs22.4 billion ($10 million) while BOU will contribute Shs6 billion ($2.7 million).
The project seeks to allow sustainable access to microfinance to help alleviate poverty by generating income and enhance livelihoods of the rural population through promotion of savings and credit culture.
Mr Byanyima said the funds will catalyse Uganda’s socio-economic transformation through increased access to finance and result into high return on capital and increased household incomes for the rural population. RIEEP is also expected to increase employment and reduce poverty levels in the country.
“By the end of the five-year implementation period, we are optimistic that the project would have reduced the number of people living below the poverty line from 31 per cent to at least 24 per cent,” he noted. He said he hopes the project will also increase the per capita income to an average of at least $550 (about Shs1.2 million) $490 (Shs1 million) per year.
The funds to be channeled through MSC will be lent to Saccos at a whole sale price with interest rates of between 9 and 13 per cent per annum depending on the loan type.
MSC is a government supported facility under the Ministry of Finance established to loan money to Saccos for onward lending to eradicate poverty.
Ms Ruth Nankabirwa, the microfinance state minister said to benefit from the fund, Saccos must be registered, must have an operating experience of at least one year, have a specific operating area, clearly defined target communities and clear ownership.
Saccos must also have adequate staffing with knowledge and skills in microfinance and basic accounting among others.
As per the principles guiding the programme, MSC is supposed to give the lead Saccos Shs10 million as a start-up provision. It then lends to the Saccos amounts depending on their member collections. Although they borrow at 9 or 13 per cent, Saccos will charge an interest rate of between 25 and 40 per cent when lending to members.
Mr Byanyima, however, attributed the high interest charges to the high cost of doing business and transacting a Sacco business, in addition to low recovery rates.
“The cost of transacting Shs100, 000 in a Sacco is much higher than transacting Shs1 million in a commercial bank,” he said. “The concern of people who need that money is not high interest rates but availability of finances.”
The RIEEP project will build rural finance infrastructure and enhance linkages of rural financial institutions to mainstream ones such as commercial banks through linkage banking and client information sharing. Ms Specioza Wandera, the MSC chairperson said RIEEP will strengthen MSC’s capacity to effectively discharge its mandate to facilitate access and utilisation of affordable financial and business development services to the rural poor.
Ms Wandera noted that the project seeks to provide solution to problems affecting rural financial intermediation such as absence of strong retail capacity in microfinance institutions and lack of access of financial services to rural areas. The rural populace also has weak institutional infrastructure including service providers such as training institutes, accountancy services, credit reference bureaus and appropriate information technologies.
She added that 90 per cent of the funding will go towards the rural population, particularly women who do not have access to financial services. MSC offers a number of loan products including agricultural development fund, which targets enterprises engaged in agriculture, agro processing and marketing, and business development fund to enable Saccos to enhance their growth, performance and participation in providing financial services.
Other products include micro-enterprise fund to enable microfinance institutions finance commercially viable customer activities, small and medium enterprise (SME) development fund and asset acquisition needs among others.
Mr Byanyima said during an interview last week that plans are underway to introduce Islamic/Sharia type of loan product to cater for a Saccos interested in that form of lending. He said $10 million from the Islamic Development Bank to the project will go towards Islamic lending and that soon experts will be in the country to offer training to stakeholders before the product is rolled out.
RIEEP is among the efforts undertaken by the government to widen Sacco outreach and increase access to financial areas across the country including the Shs24.5 billion grant comprising of 44 money safes, 55 filing cabinets, calculators and 200 bicycles dispatched in August.
The ability for Saccos to increase accesses to financial services is still hindered by numerous operational hurdles including poor governance and political inference that has negatively impacted their operations.
Lack of appropriate legal and regulatory framework to guide their operations also hampers their growth and development. Ms Nankabirwa, however, said Saccos should avoid people who politicise their operations. “Some politicians are after frustrating programmes that seek to help our people fight poverty,” she noted.
By Chris Ocowun, New Vision Uganda -
THE Microfinance Support Centre has taken legal action against the nine SACCOs in Acholi and Lango sub-region, which have allegedly failed to pay up more than sh250m theAy received two years ago.
The centre gives wholesale lending to SACCOs at 9% interest rate per annum.
The Kampala-based Bemua Strict Auctioneers & Court Bailiffs have already served the concerned SACCOs with letters of intention to sue, Jessica Lwanga, the centre’s Gulu chief told reporters over the weekend.
The affected savings, credit and cooperative societies operate in Gulu, Kitgum, Amuru and Lira districts.
“These institutions (defaulting) have already received notices of intention to sue from our debt collectors for failing to pay the loans they borrowed from the centre,” Lwanga said without disclosing the names of the defaulting institutions.
Wilson Wamatsembe, the centre’s deputy executive director, said they would now thoroughly sieve institutions before loaning them money.
By Faridah Kulabako, Daily Monitor -
The Microfinance Support Centre has launched a Shs60 billion ($27 million) project aimed at increasing access to financial services for the rural poor. Speaking at the launch in Kampala on Monday, Mr Patrick Kharmba, the resident representative of the African Development Bank, said the project will build rural finance infrastructure and enhance linkages of rural financial institutions to mainstream ones such as commercial banks through linkage banking and client information sharing.
The Rural Income and Employment Enhancement Project (RIEEP), which is jointly funded by the African Development Bank, the Islamic Development Bank and Bank of Uganda, is expected to increase employment and reduce Uganda’s poverty.
AfDB contributed Shs33 billion ($15 million) to the pool; IDB Shs22 billion ($10 million) while BOU will contribute Shs6 billion ($2.7 million). AfDB has disbursed $6 million towards the project.
Mr Kharmba noted that the financing will also catalyse Uganda’s socio-economic transformation through increased access to finance and result in high returns on capital and increased household incomes for the rural poor.
Ms Ruth Nankabirwa, the state minister for microfinance, said funds will be channeled through the Microfinance Support Centre and the Uganda Corporative Savings and Credit Unions.
To access loans, Ms Nankabirwa said Saacos should be legally registered. Dr Specioza Wandera, the MSC chairperson, said the funds will strengthen MSC’s capacity for whole sale lending to effectively discharge its mandate in facilitating access and utilisation of affordable financial and business development services to about 1.4 million rural poor.
Dr Wandera said 50 per cent of the financing will be directed to women and other vulnerable groups that get hardships, especially when it comes to accessing finances to support their projects.
By Chris Ocowun, New Vision -
THE Microfinance Support Centre is engaging court auctioneers to recover billions of shillings in unpaid loans by SACCOs in the north, a top official said over the weekend.
The state-owned centre is charged among others with the management of the rural microfinance.
Jessica Lwanga, the centre’s manager for Gulu Zone, told a media dialogue that 81 loans worth more than sh4.6b were given out to 44 institutions, including 42 SACCOs a year ago, but that up to sh3.3b had not yet been recovered.
Lwanga indicated that the biggest challenge the centre faced was getting viable institutions with proper record-keeping, adequate staff and physical location that can be given loans.
“Some of the SACCOs forge information to get money from us,” she said.
Lucy Businge, the head of operations, noted that the defaulting resulted from wrong public perception that the Prosperity-for-All money was a donation from President Yoweri Museveni.
“We have to take legal action against the defaulters. We have to account for this money.
“This is not a grant that you do not pay back,” Businge pointed out.
She lamented that the recovery rate of loans from the savings, credit and cooperative societies (SACCOs) was worse in Gulu Zone, which covers the Acholi and Lango-sub regions.
“Gulu has many loan defaulters. But the money has to be recovered.
“We are engaging legal auctioneers to help recover these loans from the SACCOs,” she said.
Businge said the situation had been complicated because some of the defaulting SACCO members were formerly internally displaced persons who have returned home.
Ruth Nansanje, the head of communications and marketing, said they were thinking on how best to serve the region.
“We intend to design specific products to suit the demand of people in each zone,” she noted.
Nansanje stated that the centre gives wholesale lending to SACCOs at 9% interest rate per annum.
The centre does not determine the interest rate charged by the SACCOs on their members. However, it cuts funding to SACCOs with high interest rates. “It is a business.
They can determine how much interest rate they want to charge. It is the mandate of Bank of Uganda to regulate interest rate levy by SACCOs,” Nansanje said.
By Ibrahim Kasita, The New Vision Uganda -
Hajjat Janat Mukwaya, the minister for general duties in the Office of the Prime Minister, said a strong household saving rate is the creation of a strong economy, jobs, and ultimately lowers interest rates and inflation.
“While people want to borrow money, they still have a culture of fearing to save. People with periodic income should inculcate the saving culture in order to reduce the current poverty levels,” she said.
“This will increase the saving ratios that will allow the youth to partake loans that will enable them start small and medium businesses. This will allow them employ more people.”
The absence of a strong savings culture has put Uganda’s household savings rate to a dismal 1.5% to the national gross domestic product (GDP) – the market value of all final goods and services in a given year – the worst in the world.
While Australia, Japan, and the US all have household savings rates of under 4%, China boasts the highest in the world of 38%, followed by India 34.7%, and Turkey 19.5%.
“We need to get the message across to people that saving money is for their own financial security. Promoting a savings culture is not only important to ensure financial well being of Ugandans in the long term but it is also essential for the national development,” she said.
Government has established the Microfinance Support Centre (MSC) to facilitate access to affordable, sustainable and convenient financial and business development services for the active and productive Ugandans.
The centre’s operations in the last financial year, disbursed sh64b to 839 institutions. However, profits declined to sh129b from the previous sh141b.
Ruth Nankabirwa, the state minister for microfinance, however bemoaned the absence of regulations to protect savers from unscrupulous and fake institutions.
“We need a good regulator to regulate the over 1,000 microfinance institutions. The law is not intended to choke the institutions but regulate them,” she said.
Under the current arrangement, the SACCOs and all microfinance institutions are not regulated and are outside the Bank of Uganda’s oversight.
Most people have fallen victims to fraud as unscrupulous microfinance institutions walk way with people’s savings.
Dr Specioza Kazibwe, the MSC chairperson, pointed out specific key areas of intervention that includes regulations and supervision of rural finance institutions to safeguard members’ deposits.
The body has started new loan products targeting agriculture, environmental, special interest groups, commercial and businesses
A total of 44 savings and credit cooperative organisations (SACCOs) in Acholi and Lango sub-regions have received sh4.5b in loans from the Uganda Microfinance Support Centre under the finance ministry.
The money is meant to boost people’s household income and fight poverty under the Prosperity-for-All programme.
According to the Gulu zone financial service officer, Jesca Lwanga, however, some areas lack viable SACCOs that can be entrusted with huge sums of money.
“Some of the institutions have poor records which makes it difficult to lend them money,” Lwanga said.
Lwanga reported that some people think that because this is government money, they should get it without conditions.
Lwanga said 40 members from 20 SACCOs in the region have been trained by the Microfinance Support Centre.
President Yoweri Museveni, during his tour and mobilisation of the people on household income, urged every sub-county to form a SACCOs from where people can access financial services easily.