The "Unbankable"

         Armstrong Abdubango, Dikiri Kabucan SACCO (micro credit co-operative)

 

CCA-UCA partnership promotes trusted places to save, borrow, insure

 Before SACCOS (credit unions) were formed in the rural Ugandan communities we visited, people hid their savings under mattresses, in holes in walls. They even buried them in termite hills.

Robberies were common. Some lost all the money they tucked away when fire burned their thatched clay huts. Savings were buried and never found after a family member died, having failed to disclose the money’s location. Savings were even eaten by rats, lured by the smell left on the bills by previous handlers, like fish mongers.

Those that did their banking at commercial institutions were frequently ripped off. Some were “very embarrassed”, in the words of Brecco SACCO members, to discover that their meagre savings had disappeared due to high “service” charges on their accounts. Often they were refused loans, being part of the rural poor that were deemed “unbankable” by the private sector banks. In addition, the distances that separated them and the banks made it too costly for most to do anything but make sure their money was well hidden from thieves and rodents.

Olivia Mugisa, Brecco SACCO treasurer acknowledged “you can’t do your banking at home.” However, the rural poor had limited options when it came to savings and loans.

 That changed 10 years ago when the Uganda Co-operative Alliance, joined with the Canadian Co-operative Association, to design and implement a program that would help to build sustainable livelihoods and reduce poverty in the sectors of agriculture, finance and micro, small and medium enterprise development (MSME).

Trusted places

One of its main thrusts was to encourage the formation of SACCOs, community-owned savings and loans institutions that provide poor and middle class households with trusted places to save, borrow and insure.

In the decade that has followed the launch of IFAPI (Integrated Finance and Agriculture Production Initiative), the number of SACCOs has increased from eight to 22 in northern Uganda. These democratically-controlled, member-owned centres now play a significant role in the socio-economic development of the communities they serve.

“Now we know how to sell our products,” said Brecco SACCO member Stella Kannyege. “We know how to save money and pay it back. We know how to control our businesses. And we know how to build groups.” 

The ripple effect of these micro credit co-operatives has spread throughout northern Ugandan society.

Impact on women

Louis Odhur, a widow and farmer in Omoyo, said her SACCO’s promotion of gender equality has had a positive impact on the women in her community. “They do not fear things now. When there are meetings they attend. It has given them courage.”

 Robert Parmu, loans officer with the Erussi SACCO, said women are now borrowing money to pay for their children’s schooling, independently of their husbands, resulting in greater “harmony in the homesteads.” Other outcomes have been a reduction in domestic violence, substance abuse and crime.

“People can now take care of their lives and control of their own destiny,” Chegere SACCO manager Peter Aceny said. “We say no more going back. We are moving forward. We are continuing until reach our destination – sustainability.”