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 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.
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.
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