When the government launched a campaign to mobilize citizens to form grassroots-based savings and credit cooperatives, otherwise known as Umurenge Saccos, in 2009, the initiative was largely greeted with skepticism as result of the earlier mismanaged and, consequently bankrupted, Micro Finance Institutions.

Less than two years down the road, however, public confidence in Umurenge Saccos has gone up, with their membership rising to more than 1.2 million.
 
Furthermore, the cooperatives’ total net deposits were at Rwf9.5 billion as of March 31, more than double their combined share capital.

There are 412 Saccos formed under the government-inspired campaign and more than 100 others established through private initiatives.

Looking at the trend, it is clear that Saccos have the potential to drastically transform the Rwandan economic landscape, especially in the rural areas.

However, there is need to lay concrete strategies that will prevent Umurenge Saccos from taking the same path as the insolvent MFIs.

One of the measures would be close follow-up on their operations to curtail any financial mismanagement, arising out of either lack of relevant technical skills or misappropriation.

Yet, the responsibility to ensure the success of these cooperatives should not rest on squarely the shoulders of the central bank and the Rwanda Cooperative Agency. Local governments, especially districts, and other stakeholders should all work towards this goal.

On the other hand, Saccos should be facilitated to get to a level where they can be able to easily provide loans to their members, since they are one of the best channels through which ordinary Rwandans can access finance to initiate income generating activities.

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