Legislators push for reforms in management of SACCOs

The government should move faster to set up a cooperative bank to manage all the country’s sector-based savings and credit cooperatives, locally known as Umurenge SACCOs, and mobilise more people to join the co-ops, legislators have said. The lawmakers in the Lower House made the call yesterday while reacting to a report by Members of the parliamentary Standing Committee on Economy and Trade about the performance of SACCOs across the country. The committee members, who toured the country in May and June assessing the work of SACCOs, told Parliament yesterday that the co-ops have generally helped people at the grassroots level to develop but they also said that clients still have concerns over the safety of their money. “Members of the committee appreciate the important role played by SACCOs in the development of the people so far,” said MP Clothilde Mukakarangwa, the deputy chairperson of the parliamentary Standing Committee on Economy and Trade. “People told us that they like SACCOs’ services but they also said that they have concerns about the safety of their money. They also wish they could access their money from any SACCOs across the country because they don’t like carrying a lot of cash while travelling.” Among the issues that MPs found as potential threats to the proper functionality of SACCOs include the continued increase in non-performing loans, the poor security provided during transport of SACCO funds, high interest rates at which they give loans, theft of the banks’ funds, and dysfunctional boards of administration for the coops. One of the important ways the government hopes to address these issues is to centralise the management of the 416 Umurenge SACCOs across the country by consolidating them under a single cooperative bank. Officials say bringing SACCO services under one cooperative bank would be comparable to services offered by commercial banks, with clients accessing services from anywhere in the country. The merger would also mean that the coops have a strong IT system making the funds’ management effective, and the cooperative bank mobilising more funds needed by SACCOs to offer more credit. Envisaged cooperative bank The Minister for Trade and Industry, François Kanimba, told MPs in September that a business model for setting up the cooperative bank could be ready before the end of the year. “We believe that setting up a cooperative bank will significantly solve issues of theft and poor financial controls at the SACCOs,” Kanimba, who was appearing before the parliamentary Standing Committee on Economy and Trade, said. The merger of SACCOs will also make it much easier and effective for the central bank to supervise the coops’ services because they would be working under one body, Kanimba said. At yesterday’s session in Parliament, several MPs pushed the government to fast-track the creation of the cooperative bank for SACCOs, saying it seems to be the best way to improve their services. “We would like to understand why setting up the cooperative bank is delaying,” said MP Theoneste Safari Begumisa. MP Suzanne Mukayijore said that the envisaged cooperative bank was essential for boosting the safety of funds in the SACCOs because it would help “curb theft within the cooperatives.” According to the cooperative inspection division of Rwanda Co-operative Agency, deposits in Umurenge SACCOs are currently estimated at more than Rwf46bn. The legislators also called on government to keep up mobilisation campaigns to sensitise more people to join SACCOs to boost the financial muscle of the institutions. editorial@newtimes.co.rw

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Legislators push for reforms in management of SACCOs