SACCOs ARE DESTINED TO SUCCEED ON PRESSING THE RIGHT BUTTONS!

 For many years now, Savings and Credit Cooperative Organisations (SACCOs) have existed to be the launch pads of welfare to their membership. SACCOs since the start of the cooperative movement been pivotal in improving that desired welfare by extending financial services to their membership and as well addressed a couple of needs from their membership right from inculcating the spirit of savings and extending credit facilities and the overall ownership benefits (WOCCU 2011). SACCOs basically exist for the dual mission that is the social and sustainability, and are the easiest way that different members of the communities can meet, share and unite for the common good.

In the eyes of the constantly changing environment coupled with the shifts in the tastes and preferences over time, SACCOs risk losing the coop status in many communities despite the growth in financial aspects of the populations (Finscope Uganda 2023 findings). SACCOs on the reflection of Member owned financial service provision (the New Microfinance Handbook,-Joanna Ledgerwood) should press the right buttons in fulfilment of their roles to progressively contribute to the national economic development in the following ways;

Financial Education -SACCOs devoting time and money in educating members on money management and other areas related to health, housing and the general member wellbeing as the cooperative principle no. seven (7) stipulates (WOCCU 2011).

Promoting a saving culture – Continuous encouragement and cohesion with members towards minimum savings contributions with a reason to build up the primary goals right from their entry into the SACCO.

Accessibility to Credit- Setting up innovative measures towards much quicker and less expensive means to access loans especially for members with a good history on savings and good credit scores.

Investment opportunities – Embracing the majority of the SACCOs members’ desires in provision of better investment alternatives to members such as owning Land, community projects, housing at low cost.

Return on investment – SACCOs have a duty to declare return on members’ shares and savings in the form of dividends after they have had successful periods and give interests based on the progress results and the all round favourable terms.

Shared ownership and governance – Enhancing capacity of the Board and committees in engaging constructively and respectfully for collaborative decision towards performance of the SACCO. Not forgetting the general SACCO memberships who are the architects of the SACCO contrary to other financial institutions.

From the policy paper for Presidential Economic Council, March 2018, efforts have been made to support cooperatives including government support to cooperatives. However in a bigger dimension, all existing SACCOs with support or not should continue to bridge the gap towards youth involvement, gender sensitivity, and carry on empowerment programs to sustain emerging community interests in leadership, and representation at all the SACCO structures. Some SACCOs have gone a notch higher to growing more saving mobilisation schemes to set up organisations- like schools, small scale industries to support community interests which is commendable.

It is imperative to know that a number of SACCOs in the given area or region has seen a great deal of members develop a positive mindset given the shared cost of spreading impactful information about the services and the citizenry rights and obligations unlike in areas that have fewer cooperatives.(Lawrence M Kyazze, 2010).

However with all progresses in the SACCO space, the cooperative spirit is rather getting drifted as a large proportion of people are into getting richer faster schemes or commonly termed as ‘kagwirawo’.

Today, it is even posing trickier scenario given the dynamic environment and the many players in the same sector willing to operate minus the minimum operational standards. It’s now very common to find a large number of individuals battling court cases and some shunning the public eye because of shrewd business sharks.

This has impacted SACCOs to continuously investing in creating awareness and innovative solutions towards member loyalty and discipline that is good but damn expensive.

SACCOs that do not evolve will dive into dormancy state or even close shop due to the several challenges including the following;

·       The knowledge gap- and this leads to limitations in role differentiation between the Board and management plus the membership which has a toll to the going concern of these SACCOs.

·       The innovation gaps to suit the ever-changing environmental needs such as developing new products that keep SACCOs positioned for choice in the community.

·       Closure in the face of regulation- SACCOs risk closure out of business with failure to comprehend and modify operations as per standard requirements.

·       More personal entitlement and SACCOs being taken as a by the way or priority in the sense of credit accessibility and fulfilment of obligations.

·     Limited information on the sector players including organisations and institutions with different missions and objectives that have infested today’s financial and social markets.

·       SACCOs by large across the country may be vulnerable to security concerns especially that most of them operate remotely and serve in the hard-to-reach areas however these can be overcome by insurances.

There are also many other areas to focus on pertaining the growth of any SACCOs, as the SACCO grows organically, there are always initial areas that if not well streamlined, they’ll always pose a challenge to growth. For example, the SACCO objectives, the purpose, the roles and obligations of the members, transparency and finally the leadership question to help drive the voluntarism nature of the cooperative to the borne of each member. As this is part of the core areas to focus, the humanism in us normally breeds the selfish interests and many other tendencies that work against the SACCOs.  If there are well documented points of references such as the bye laws and policies that are strictly and well adhered to by the entire leadership any SACCO would leap forward.

 

Andrew M Mugumya (andmugumya@gmail.com +256700177637)

Financial Services – Practitioner.