A business model for setting up a cooperative bank to manage all the country’s sector-based savings and credit cooperatives, locally known as Umurenge Saccos, could be ready before the end of the year, the Minister for Trade and Industry has said. 

François Kanimba, who was yesterday appearing before Members of the parliamentary Standing Committee on Economy and Trade to talk about how to improve services offered by Saccos, said a technical committee at the Ministry of Finance and Economic Planning had reached advanced stages in its study on how to organise the SACCOs into one cooperative bank and that the government will soon decide how the bank will operate.

"We are conscious about delays that happened in terms of designing the bank’s model of operation but there are technical teams working on it. We have a target that, before the end of the year, we should have reached a decision about the bank’s business model,” the minister said.

Officials say grouping all the country’s 416 Umurenge Saccos under one bank would improve services offered by the grassroots savings and credit unions.

Clients would be able to access financial services from any Sacco agency in the country, work more with other banks, expand the financial power of the cooperatives, and ensure safer management of the funds under Saccos.

Benefits of consolidation

Kanimba said bringing SACCO services under one cooperative bank would be comparable to services offered by commercial banks in the country, with clients accessing services from anywhere in the country.

It will also have a strong IT system making the funds’ management effective, and the cooperative bank mobilising more funds needed by Saccos to offer more credit.

"We believe that setting up a cooperative bank will significantly solve issues of theft and poor financial controls at the Saccos,” Kanimba said, explaining that it will be much easier and effective for the central bank to supervise Saccos once they are working under one body.

According to the Cooperative Inspection Division Manager at the Rwanda Co-operative Agency, Gilbert Habyarimana, deposits in Umurenge Saccos are currently estimated at more than Rwf46 billion.

Members of the parliamentary committee met Minister Kanimba to share their findings on how Saccos are managed, following a countrywide tour they made to assess the coops’ financial services.

Overall, the MPs said, Umurenge Saccos are offering good services to the people at the grassroots level but some issues of theft of funds and poor marketing of the banks’ services to the most vulnerable members of communities such as women and the youth need to be addressed.

"Umurenge Saccos are delivering financial services very well but they need to be empowered so they can keep serving the people,” said MP Clothilde Mukakarangwa, the deputy chairperson of the committee.

MPs tip on consolidating SACCOs

The MPs also advised the minister onwhat should be kept in mind while restructuring Saccos to form one bank. MP Emmanuel Mudidi advised that Umurenge SAccos shouldn’t lose their legal status of being local cooperatives even if a cooperative bank to manage them is set up.

"People use the services of Saccos partly because they feel it is their own bank; their own cooperative,” Mudidi said.

MP Nura Nikuze said setting up a cooperative bank to manage Umurenge Saccos should ensure that they are competitive enough to compete with commercial banks in terms of their ability to attract clients.

"One way of making Saccos competitive would be to ensure that they offer loans at a lower interest rate in comparison to commercial banks in the country,” she said.

Umurenge Saccos were established in 2009 in every sector of the country with the aim to strengthen the financial sector through enabling the general population to have easier access to finance and spur the country’s economic growth and sustainable development.

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