Kyotera saving scheme brings joy to residents

Kyotera- More than 650 registered saving groups in Kyotera District are benefitting from Village Savings and Loans Association (VSLA), which is turning into a formal alternative saving scheme for residents.

The scheme is steadily improving people’s livelihood. Several residents, especially those running small-scale businesses, are finding solace in the arrangement.

To become a member, one must be 18 years and above with a reputable record and pay a commitment fee of Shs15,000.
Members meet on selected days of the week where weekly contributions are made. One of the groups under VSLA is Kyanasanja Twekembe Village Saving Association in Kirumba Sub–county.

Each member saves at least Shs2,000 whenever they convene every Monday.

Ms Margaret Nakitayimbwa, the chairperson of the saving association, says members have learnt to work hard, manage their small resources effectively and invest productively.
The savings scheme has been running for six months.

“Many members have attained skills in managing small businesses and record keeping,” she says, adding that more than 30 members are involved in saving.

She says most of the members are farmers who get loans to buy coffee fertilisers, seedlings and maintaining their banana plantations.

In Kyanasanja group, members bought chairs for hire, a source of income.
Ms Rose Namutebi, the group secretary, says the scheme has helped her improve record keeping which has given other members morale to replicate the same.

“The meetings we hold every week to make deposits enable us to exchange business information and offer mutual assistance in the technical and managerial aspects of businesses,” Ms Namutebi says.

Mr Ashraf Bukenya, another member, says the first group was mainly for women, but the new system motivated them (men) to join.

“My wife was part of the first group and she used to contribute a lot to the family and this forced me to join to avoid embarrassment in my home and this helps me work very hard,” Mr Bukenya says.

Mr Vincent Male, another member, says he had earlier failed to start piggery farming, but when he joined VSLA, he got an opportunity to borrow more than Shs15,000 for the business.

“My first plan was to borrow from a Sacco which is in our home area, but I was scared of the high interest rate and the duration for paying back the loan,” Mr Male says, adding: “So, being a target saver, this group gave me an opportunity to save indefinitely.

Mr Allan Tendo, the district VSLA supervisor, says so far a total of 22 groups in the district have received loans ranging from Shs1 million to Shs3 million from different banks depending on their share capital.

“This money is from government and we give it to individuals who are already saving with their groups to enable them boost their small businesses,” Mr Tendo says.

The State Minister for Microfinance, Mr Haruna Kasolo, also the Kyotera County MP, says the saving system has been embraced by many people in rural areas and is now being adopted in some urban centres.

He says the VSLA system is managed by Project for Financial Inclusion in Rural Areas (PROFIRA) which focuses on increasing access to sustainable financial services to the poor through promoting savings and quick loans with less or no interests.

Compared with other countries in the region, Uganda has the lowest savings to Gross Domestic Product (GDP) ratio, at 13.48 per cent with majority of the population not using banks.

Information from Uganda Bureau of Statistics shows that only 12 per cent of the population have bank accounts while research shows that Ugandans save less than 5 per cent of their monthly earnings compared with Kenya (23 per cent), Tanzania (13 per cent) and Rwanda (18 per cent).

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