Saccos play key role in development
Posted Thursday, January 16 2014 at 02:00
Over the past years, a lot has been discussed in regard to Uganda’s alarming problem of youth unemployment. Among the commonly suggested measures, we have always had the restructuring of our education system from a theoretical one to a practical and research-based one. This specifically calls for the strengthening of vocational education through the Directorate of Industrial Training and Business, Technical, Vocational Education and Training.
The government has also been observed by a great majority to be working to eradicate this problem through programmes like Bonna Bagagawale also known as prosperity for all and the youth fund, among others. However, none of these achieved its objectives.
Uganda’s unemployed population is too large for the current job market to absorb. The problem is now beyond finding jobs but rather creating undertakings that will prompt the unemployed to find which avenues are best for them to embrace.
Uganda today needs more community-based initiatives like Savings and Credit Cooperative Organisations (Saccos), especially after the demise of the popular cooperatives in the early 1990s.
Saccos have numerous advantages: They have an advantage of total inclusion. Everyone has an equal chance of joining and saving as long as they can meet the “minimal” and affordable requirements.
Saccos encourage saving within the respective communities in which they operate. We would, therefore, call upon the line ministry through the Sacco Support Centre for subsidisation to such saving groups owing to the fact that there is almost no saving culture in the country due to people’s low earnings the fact that most Ugandans are currently relying on loans to run their day-to-day lives.
Saccos also encourage safe borrowing. Most of the Saccos in Uganda lend money to members at an interest rate as low as 3per cent.
It is with such opportunities that Ugandans will multiply and realise returns at a grass-root level. Most specifically, this would likely start systematically by developing the informal sector, the SMEs and finally expand the growing industrial sector. As an added advantage, this would build Uganda’s financial sector and encourage money borrowing at a higher level with the thriving financial institutions as supported by such community savings.