The Independent Uganda: You get the Truth we Pay the Price
Sembabule, Uganda | THE INDEPENDENT | Multiple registration and borrowing are frustrating the growth of Savings and Credit Cooperative Societies-SACCO’s in Sembabule district, according to the authorities.
SACCO’s are member-founded microfinance institutions established to promote the saving culture and address the financial needs of members in terms of extending credit. However, SACCO managers in Sembabule district are concerned about the divided loyalty of their members.
Daniel Kintu, the Manager Sembabule Savings and Credit Cooperative Society-SACCO which operates in Sembabule Town council, says they found themselves in a dilemma since a big number of their members are subscribers in multiple Saccos in the area.
He says that as a result, many subscribers have also made it a habit to borrow from several SACCO’s, which increases the default rates on loans.
Kintu says despite the fact that the SACCO’s were primarily established to promote saving, many people have turned to them for loans.
Although Kintu is hesitant to disclose the size of losses incurred because of defaulters, he blames the problem to the poor implementation of the regulatory framework by the relevant authorities. He appeals to the office of the District Commercial Officer to cause for the re-registration of members of various SACCOs to check on those with multiple memberships.
Margret Namagembe, the Manager South Buganda Teachers’ SACCO confirmed the problem, saying many of such microfinance institutions are yet to have their loan details captured by the Credit Reference Bureau, which would enable them effectively monitor their client’s borrowing behaviors.
Simon Peter Ddungu, the Sembabule District Commercial Officer, says his office has embarked on organizing refresher trainings of all SACCO members and managers to awaken the true spirit of their establishment.
Ddungu has in the meantime, asked SACCO managers to exercise due diligence on any clients before offering them loans.
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