The government should do its best to ensure that money saved in sectors’ Savings and Credit Co-operatives (Umurenge-Saccos) remains safe and continues to increase if local residents are to maintain the saving culture, Members of Parliament have said.

The lawmakers made the remarks, yesterday, as the Minister for Trade and Industry, François Kanimba appeared before a parliamentary standing committee on political affairs, gender, and development to provide answers on concerns raised by the Office of the Ombudsman for the fiscal year 2013-2014 on areas that need to be improved in the management of Saccos.

Among the issues feared as potential threats to the good management of Saccos include the continued increase in non-performing loans, the interference of local officials in the management of Saccos, the poor security provided during transport of Saccos’ funds, high interest rates at which Saccos give loans, and dysfunctional boards of administration for the Saccos.

Kanimba downplayed the issues highlighted, indicating that some of them existed at the early years of the Saccos and have since been rectified.

On non-performing loans, Kanimba said that the issue does not amout to cause for alarm even if the Saccos’ non-performing loans are at 7 per cent, beyond the acceptable 5 per cent threshold.

He said that the situation where local officials and opinion leaders in sectors used to interfere with Saccos’ management is no longer there because managers of Saccos and its accountants have gained enough experience and confidence to avoid bowing to the local officials’ orders.

According to the Director General of the Rwanda Cooperatives Agency (RCA), Damien Mugabo, non-performing loans held by influential local officials have also been reduced because the latter have been cooperative in servicing their loans since the coops started sending a list of all Saccos’ debtors to the governors of provinces.

"A list of people with non-performing loans with Saccos is sent to the governors of provinces every three months and this practice has helped in ensuring that local officials pay their loans on time,” Mugabo said.

On dysfunctional boards of administration for the Saccos, Mugabo said that the issue is no more because all the Saccos in the country have functional boards of administration and that every time members of boards step down, they are replaced.

However on poor security provided during money transit, the officials admitted that Saccos are often unable to afford services of armed security providers.

MP Petronille Mukandekezi, urged managers of Saccos to be more prudent when it comes to carrying their clients’ money from one place to another.

"There are people travelling long distances on motorbikes while carrying five million; we should be very careful,” she said.

On security of the money in Saccos, Minister Kanimba said a big cooperative bank that brings together all the Saccos will be formed this year which will be able to afford better security services for the Sacco cash and provide them with affordable insurance in case their money is stolen or lost.

On high interest rates (24 per cent) at which Saccos give loans to their clients, officials said the interest rate will be reduced in the future as a result of more clients joining the Saccos and growing their savings.

According to the Cooperative Inspection Division Manager at the Rwanda Co-operative Agency, Gilbert Habyarimana, deposits in Umurenge-Saccos are estimated at more than Rwf 46 billion.

MP Jean Marie Vianney Gatabazi called for the money already saved in the Saccos to be carefully managed.

"We need to make sure that money saved with Saccos is managed very well. Failure to manage the money saved with the Saccos would seriously discourage the growing saving habit among Rwandans,” he said.

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