Low Savings, Theft, Crippling Uganda Saccos
SPECIAL CORRESPONDENT
THE UGANDA Co-operatives Savings and Credit Union (UCSU) last week hosted a regional congress on savings and credit co-operative organisations (Saccos)
It hosted the congress with support from the World Council of Credit Unions (WOCCU) and the Canadian Co-operative Associations (CCA).
Over 290 participants attended from 21 African countries, including representatives of savings and credit co-operatives, scholars, regulators and other micro-finance operators under the theme, "Building Safe and Sound Saccos for Member Mobilisation and Economic Empowerment."
At the congress, it was revealed by Ministry of Trade officials that Uganda's efforts at reducing poverty are being hampered by the poor culture of saving.
Although the level of absolute poverty, which defines people who live on less than $1 a day, has gone down from a high of 55 per cent of the population in the early 1990s to about 35 per cent, ministry officials say it would have been lower still had Ugandans had a saving culture.
"This achievement would have been greater than this if savings and credit co-operatives in the country realised the great potential they have of mobilising the people out of poverty," the Minister of Trade and Industry, Prof Edward Rugumayo, said.
He said that the government was currently revising the law governing co-operatives following the revival of the co-operative movement in July 2002 in an effort to encourage the culture of saving.
The co-operative law was last revised in 1991. The minister said the country's savings rate was below five per cent of the gross domestic product (GDP), the lowest in sub-Saharan Africa.
It is on these grounds that the government decided to revive the co-operative movement in order to empower its people economically through pooling resources together, the minister added.
In the past, many people have been discouraged from joining co-operative unions after losing money to untrusted managers. At the same time, many Saccos have gone under due to lack of repayment of loans advanced.
There are 1,090 registered savings and credit co-operatives in Uganda with a membership of over 400,000 people.
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