By Yvonne Msemembo and Stella Teta

Savings and credit cooperative, so-called SACCOS, are often the only providers of financial services in rural areas. Despite this development in Uganda they have had a mixed record of success and failure.

Frequent reports about mismangement and fraud make many farmers think twice before becoming a member. But this is not the case with Mateete SACCO. Situated some 180 km from Kampala city, in Sembabule district, central Uganda Mateete SACCO was formed in 2003 and serves as a role model for successful agricultural lending.

Justine Kasoma a techical officer of the financial systems mangement programme under the German development Co-operation GIZ says Mateete SACCO is a beneficiary of the programme being implented in the country in collaboration with the Bank of Uganda. On a recent visit to Mateete SACCO she attributes its success to good managemnt and the recently installed software of a database that keeps track on the performance and operations of the SACCO.

Improving the lives of rural farmers

Mateete SACCO's manager Lawrence Busuurwa and Justine Kasoma look over loan reports

Mateete SACCO has done alot to improve the lives of rural farmers from the financial products it offers. Justine says the microloans provided have a grace period of five months and repayments start on the sixth month, the deposits are safe and members can have access to loans whenever they want as long as they meet the criteria.

Poor management and lack of good governance have been pointed out as the leading challenges that could result in the collapse of a SACCO but Mateete SACCO has managed to overcome these problems by being an organised organisation with an effecient board in place, a good accounting record and a well motivated staff. Justine Kasoma Says that its ability to reach out to the rural population has also made it a success.

Climate, borrowers pose challenges

But Mateete SACCO does face challenges. The senior laison officer in charge of loans Elias Kayinamura says the challenges include the impact of climatic change and multiple borrowers. The loans risk portfolio at the SACCO stands at 21 percent, but he says through improved record keeping farmers are able to manage their finances better, and build the confidence of the SACCO.

Thadeus Kiggundu who owns a 108 acre banana plantation is a beneficiary of financial services provided at Mateete SACCO. He says he has been able to access loans which have enabled him to make successful developments on his farm, but at his current level he would now like to have access to bigger financial funds.

Innovative services

Mateete SACCO has not been behind in inovating its services. This can be seen from the moblie banking services it offers to farmers who in the past have had to walk long distances to make finacial tansactions but can now make payment  such as of school fees, business and loan repayments just from a mobile phone.

The growing developments at Mateete SACCO if replicated in other parts of rural Uganda will definately bring positive and sustainable economic development to the poor who depend on agriculture for their livlihood. This is what the Financial systems programme is trying to do by supporting micro financial instititions  such as SACCOS operate more efficiently so that they are able to reach more people particularly in the remotest parts where there is little or no access to formal financial services.

Please watch the entire report below:

Listen to the radio report on Mateete SACCO:

Mateete SACCO: Helping Farmers in Central Uganda by financeafrica

By Emmanuel Wodomal Emrow

For many farmers in eastern and sub-Saharan Africa, micro-financing has delivered sustainability and growth. It’s paving the way for agricultural investment in the region, which single-handedly holds the potential to transform the poverty-stricken continent into not just a surplus for food but a huge business arena to better the lives 0f over 22 billlion people, who live below the povery line — earning less than a dollar a day.

In Uganda, Centenary Bank has majored in micro-financing so as to help small-scale farmers achive their dreams. With over 38 local branches spread in over 50 districts, 4 service centres and over 80 ATM machines, the bank offers different types of loans: micro loans which stretch from 100,000 to 500,000 Ugandan shillings, the equivalent of 190 dollars; loans for small and medium-sized businesses, so-called SME loans, and corporate loans, of over 100 million shillings advanced to graduated loan recipients.

The bank believes in the power of these loans to help them meet the daily needs not just in the farms but in their homes for sustainability and growth in an agro-based an yet agri-biased nation, faced with the constant policy conflict that continues to shadow the sector’s snail-paced growth.

Successul business plan

First established in 1983 as a trust fund, the bank has grown eminently through the scheme. Agri-financing for instance, forms 18% of the total portfolio, bringing in a whooping 77 billion shillings in revenue to the bank with a loan recovery rate of 90%. Succcess? No question about it.

Patrick Oyaga, the chief financial officer, is at the helm of this campaign and leads the commitee for assessment and evaluation of these loans — the brains behind the schemes progress.

“Our main business is micro-finance small depositers and the borrowers, but we depend mostly on loan officers for our lending,” he says.

Loan officers are the soul of the project

The soul of this 18-year-old project has been in the hands of its over 300 loan officers, spread far and wide through its branches to make the idea reachable to its growing multitude of customers — especially the rural population, who have been alienated by the remoteness of their farms.

Mr Emmanuel Ngoga is a lead loan officer at their branch in Mukono. He works tirelesly to bridge the gap between the banks faithful, pending loan receipients and the management. At the dawn of every day, he is dedicated to the challenge of balancing bank interests and making the farmer a succesful businessman an yet a loyal customer. His job revolves around appraising, visiting farmers to assess the potential of the farmers to repay the loan.

“We assist the farmers but also as an instituition we have to make a profit,” he says.

Growing a farm with the help of loans

In Mukono, one of his loyal clients is Mr Francis Ssenfuma, a poultry farmer who now rears over 2,400 birds that he was able to purchase with his first loan after he suffered bird flu attacks, which robed him of his first flock.

“The loan helped me to add more to my farm, ” he says. “I bought more birds and now i can repay the loan by selling my birds.”

He has also managed to build new shacks. In them, he plans to rear more animals, especially cattle, grow crops and become one of the most prominent farmers in Mukono.

He is hopeful that his favourite loan officer will help him realise his dream.

Watch the TV report below:

By Irene Simiyu and Nicholas Nyombi Prince

Mobile money, a service that allows people to do financial transactions on their phones has become so popular in Uganda, especially in the rural areas.

A recent Finscope study reveals that only 18% of Ugandans are served by the formal financial institutions. As a result, people in rural areas have found an alternative scheme in mobile money. The introduction of this service has tapped in the rural areas, where formal financial services hardly penetrate and are deemed to be out of reach for the common man.

The service has revolutionised the way people transact. It makes it easy to pay bills and carry out business transactions without having to be physically there. It saves time and money, because transaction can be made from virtually anywhere. Its very convenient and goes a long way to bridge the gap that had been left by the financial institutions.

A threat to banks?

Mobile Telephone Network (MTN) was the first to launch Mobile Money in March 2009, and other providers Uganda Telecom Limited (UTL) and Airtel have followed suit. For one to access these services, he/she needs to register with the mobile phone service provider where they are given an account and a secret code that is used when sending or withdrawing money.

Steven Mulumba, a coffee trader in Sembabule district says, it couldn’t have come at a better time. This service enables him to pay his suppliers, pay school fees for his children and better still pay his loans. However, some people think this trend is a threat to the commercial banks in the country who have failed to go deep down in the village, while others see it as a compliment to the conventional financial services.

Listen to Nicholas Nyombi Prince’s radio report below:

Mobile Money Enhances Banking in Rural Uganda by financeafrica

Watch Irene Simiyu’s TV report below:

By Timothy Ondere

They say “money makes the world go round” — and indeed it does. I strolled down the streets of Kampala, brushing shoulders with street kings, queens and their proteges, trying to find out how they put food on the table. Truth be told, though we have many unpublishable ways of making money down here, we still have legal ways, too, that have a future.

Living at the Hotel International in Muyenga, a 15-minute drive from Kampala, I would make my first stop at a 24-hours shopping center by the name Kabalagala. Here everything is available at whatever time of the day and every one is so welcoming — save for a female bouncer I met at one particular club, who wanted to thow me out for asking her where the toilets were before making my order.

Kampala downtown would be my prefarable second stop.  There is something about streets in these areas that is always fresh and since my story is about money exchanging hands there is no way I would have avoided the red-soiled streets of Kampala.

It is here that I bumped into Josephine Birungi, who gave me a moving story of how she got herself off the streets and got help at Kabaawo Mutundwe co-operative savings and credit society limited, a 30-minute drive from Kampala. She says she owes her entire life to the organisation, they trusted her with their money when she went to ask for capital to start a business after seeing her business plan.

Josephine started a business in poulty farming two years ago and she has never looked back. I visited her farm and the sacco where she is a member now and filed the following report:

By Vincent Wamundu 

With the recent rise in security scares, security detail was beefed up to protect the world in Kampala. The bell was used as sign to show things were ready to roll in the Victoria ballroom. Since many people from different nationalities attended, translation was a key factor.

In the first meeting on the 29th of June 2011 delegates came in at the Speke Resort Munyonyo, ready for the conference, dubbed “Zipping Finance and Farming” that took place in Kampala.

At the entrance all delegates were obliged to register and get accreditation; however some delegates took this time to get in contact and build networks among the participants before heading into the ballroom in order to listen to presentations and reports presented to them.

Coffee breaks were offered in between the presentations to make sure that delegates were awake and alert through out the meeting and during the afternoon, lunch was also offered.

Getting down to work

After short presentations participants were divided into discussion groups. They were given the mandate to tackle different topics for efficiency in the final document, the key factor being successful initiatives and approaches from agricultural and financial sectors. The groups discussed different topics such as training and technical support tackled funding, draft policy paper on agricultural finance and public sector policy.

According to the program, the workshop was supposed to come up with the so-called Kampala principles for agricultural finance policies in Africa, the draft committees were formed from among participants to discuss the vital principles, intended to convey suggestions for actions on the development of agriculture in Africa.

As they say: work without play makes jack a dull boy. So on the 3rd day of the conference, which was the last day, all laptops, head phones, microphones, pen and paper were put away and all the delegates embarked on field trips around the country.

For sure excitement was clear on their faces, a sign that truly, the conference had met its goal.

Watch Timonthy Ondere’s TV report on the conference below:

Watch an interview by Yvonne Msemembo with Ugandan State Minister for Finance Fred Omach:

Watch an interview by Yvonne Msemembo with Fabian Kasi, managing director of Centenary Bank of Uganda:

Watch an interview by Yvonne Msemembo with Susanne Dorasil, German Ministry for Economic Cooperation and Development (BMZ):

Watch an interview by Yvonne Msemembo with Christian Königsperger, head of the financial sector development programme of German Development Corporation GIZ in Uganda:

By Sandra Kahunde

Traditionally in Uganda, many households have depended on subsistence agriculture, which is characterized by low production of both food and cash crops. Katende Harambe Rural-Urban farm, situated on a 7-acre piece of land that’s located near one of Kampala’s suburbs, is a demonstration center for sustainable farming.

It’s both a livestock and vegetable farm with 3 acres of fruits like oranges, passion fruits and maize.

A privately-owned project, Katende Harambe is as well a training center for advanced farming techniques, with Henry Stanley as the site and training manager.

Providing quality training and extension services to urban and rural communities, small-scale farmers and partner organisations in sustainable intergrated farming is its key mission.

Education is vital for agriculture

“We know that education is very vital for agriculture to work,” Henry Stanley says.

As he and his colleagues sensitize and train farmers to improve their agricultural practices, bio gas is another subject taught to them.

Bio gas is a gaseous fuel produced by the fermentation of organic materials, such as animal manure, which is a very rich source of soluble nitrogen.

The successful economic and training activities of Katende Harembe are providing stepping stones to improve the agricultural sector of Uganda.

Please watch the entire report on Katende Harembe’s activities below:

By Coletta Wanjohi

A visit to Massaja zone, in Kampala, Uganda brings us to the home of Francis Mukiibi, a poultry farmer who has been in this business for 20 years now. Mukiibi, who inherited his farm from his father, rears over 2,000 chicken at the moment. This number may look big to many — but to him, it is not since he has lost over 1,000 chicken in a span of two months due to failure to provide enough food for them.

In Uganda, chicken feed mainly on maize brand, the leftovers of milled maize. This is then mixed with other feeds like small fish, and then fed to chicken.

However, since April 2011, farmers like Mukiibi have had to grapple with a shortage of maize brand in the country. Mukiibi says that this sudden shortage has been highly contributed to by Uganda’s open policy to maize export.

Maize-hungry neighbors

Drought in neighbouring Kenya has attracted many buyers to Uganda and neighbouring Sudan, known to be insatiable when it comes to food supply, is also a big buyer of Ugandan maize.

The shortage in supply of maize brand has translated into an increase in the price of 100kg of maize brand by up to 40,000 Ugandan shillings. A bag that used to go for 70,000 shillings at the beginning of April 2011 is now up to over 100,000 Ugandan shillings.

Mukiibi says that the shortage and price increase in maize brand is making his cost of operation high. Instead of the 100kg bag that he would order in a week for his chicken, he now only can afford to have half of that and make do with a mixture with other feeds. This, he says, has made the quality of his chicken reduce.

High maize price forces farmers out of business

While some poultry farmers like Mukiibi can still try to get food for his chicken, others have already been forced out of the business. Many farmers are now selling off their chicken even before they have reached the maturity age of 4 and a half months. With the flooding of chicken in the market, the price is now at a low of between 5,000 and 6,000 shillings.

Chicken dinners have rarely been more affordable in Uganda

The danger that farmers like Mukiibi face is following suit and closing shop. “Im also at the verge of collapse, it is just a matter of time and I will be poor,” says Mukiibi.

Farmers call on government for help

The association of Uganda poultry farmers at the beginning of June 2011 held an emergency meeting with the state minister of planning, Henry Banyenzaki. The association members protested the over-exportation of maize and they threatened to take their poultry in front of his office to die there if goverenment did not offer a solution.

They claimed that they were tired of watching over 100 chicken die per day because of lack of enough feeds.

Bank loans not an option for farmers

The aspect of accessing assistance from finanancial institutions is not a popular idea among many poultry farmers. Rhoda Musoke, who has seen her 2,000 chicken succumb to starvation laughs at the idea of approaching a bank for aloan. “How can I expose my assets for the banks to take them beacuse of loans?” she asks.

The fear expressed by many poultry farmers like Rhoda is that the interest rates offered by banks rating at over 1.8% per month is too high and the collateral is unrealistic.

The current challenge in the poultry industry is posing a danger that the chicken we love to eat so much may not be there for us to enjoy in the near future.

Watch Coletta Wanjohi’s report: