Church-based Saccos helping communities overcome poverty

Church groups are set up for different purposes, depending on the particular church. While the purpose of some groups is to strengthen the spiritual lives of the members regardless of the quality of life they are living, others are set up for economic empowerment.
On December 12, 1988 after Sunday Mass, Christians of Naddangira Catholic Parish in Katiri, Wakiso District were called for a meeting by the Parish Planning Development Committee (now Caritas Kampala) led by Reverend Father Joseph Kakooza. Previously, after the 1981-1986 liberation war the committee had been trying to sensitise the parishioners on how to fight poverty.
During the meeting, the idea of forming an economic group was floated, with interested parishioners paying a membership fee of Shs200, while the shares cost Shs300.
Susan Muwanga, now the chairperson of Naddangira Agali Awamu Savings and Credit Cooperative Limited’s supervisory committee, was among those who attended the meeting. Today, she owns a primary school in Wakiso Town Council.
“The next Sunday, 49 people registered. We selected a seven-member committee that was entrusted with going around the sub-parishes to mobilise people to join the group. Rev Fr Kakooza was our treasurer,” she says.
To grow the savings and encourage members to participate in animal farming, in 1992 the group set up a farm supply shop stocking feeds and veterinary medicine. Members would take feeds on credit and pay back with trays of eggs. In 1994, the group was officially registered.
In a similar fashion, 25 youth at Kisubi Catholic Parish had made it a habit to congregate under a tree after every Sunday Mass. It was a time of lively banter as they caught up on the weekly gossip. In 2008, the chaplain, Fr Bernard Mpoza, advised them to start a Sacco that would benefit them.
Magdalene Nakiganda, one of the youth then, says, “He advised us to meet every Thursday, with each one of us bringing Shs1,000 to the meeting. After five weeks, when one had made Shs5,000 he or she would become a member. Many of us agreed to Fr Mpoza’s idea because we respected him. But, we did not understand what he was saying. I was earning a living from digging in people’s gardens and I wondered how I could save Shs5,000. For what purpose?”
The youth invited others in the 12 sub-parishes of Kisubi and registered their Sacco as Munaku Kaama Kisubi Cooperative Savings and Credit Society Limited. The sub-parishes were encouraged to buy 20 shares and apply for loans to start projects for the youth.
Individual youth were encouraged to open savings accounts in the Sacco and buy shares at Shs10,000.

How the Saccos work
“The Sacco was run in the youth office at Kisubi Parish. We used to beg people to take loans. No one knew what to do with the loans until Caritas began giving us financial literacy lessons,” says Nakiganda who now owns a retail shop, an outside catering business, and is a pig farmer.
The first loan she took was of Shs250,000 which she used to open a small restaurant and study a catering course.
Today, Naddangira SACCO has 6,249 members and is worth Shs3.4 billion, of which Shs1.6 billion is members savings. The Sacco, an agent of Centenary Bank Limited, employs 36 people all of whom are its members.
As of December 2017, Munaku Kaama, with 2,632 members, is worth Shs1.7billion, with members savings amounting to Shs735million.
As both Saccos grew, the mother parishes leased land to them where they built premises using their savings.
Naddangira Sacco, spent Shs200million on building their home over a period of six years. This has been a tremendous advantage when it comes to recruiting new members because people usually trust financial institutions which have permanent premises.
The cost of a share in the Saccos is now at Shs10,000. Besides savings and loan services, members are trained in financial literacy and basic business administration skills.
The trainings are supported by Caritas Uganda. Each member has the responsibility of bringing a new member into the Sacco.
Besides saving clients’ money, the provision of quick and timely loans has helped members to boost their household income.
Some of the loans offered include school fees, agricultural, bodaboda, and commercial loans.
Jude Thaddeus Makumbi, the chairman of the board of directors of Munaku Kaama Sacco, says, “Our members who are bodaboda riders come to us for loans to buy their own motorcycles, both new and used. We negotiate with the seller on their behalf, buy the motorcycle in the Sacco’s names, and then, take the rider to a driving school. We then give them the motorcycles and after they have finished paying back the loan within 18 months, we transfer the bodaboda to them. The same method is used for those who want to buy land.”
Munaku Kaama Sacco also engages in tree planting on the eight acres of land they bought on Bombo Road at Shs64million.
As Naddingira Sacco continues to grow, it has given birth to two other Saccos, in Masuulita and Busunju.
The Sacco has also set up a demonstration farm financed by the Skills Development Project in Private Sector Foundation Uganda (PSFU).
Mr Charles Muwonge, the Sacco’s marketing manager, says the farm is aimed at boosting farmers’ productivity.
“Because of unreliable rainy seasons, we have seen members’ savings reduce and loans are not being paid back in time. This farm trains them on irrigation, keeping water reservoirs, crop management, the use of pesticides, and how to obtain high yields from small pieces of land.”
Unlike the other Saccos, Kampala Archdiocese Cooperative Society (KADCOS), worth Shs2billion and started in 2007 by Fr Gerald Mpanju, is venturing into manufacturing. Their pilot project of making sanitary wear will soon be rolled out onto the market.
Mr Henry Mulumba, the manager, says before they embarked on the project, they carried out a market research in schools. “We are only waiting to install a steralisation machine to steralise the pads we have made, and certification from Uganda National Bureau of Standards before we hit the market. Our pads are made from paper and papyrus powder. Papyrus, which is absorbent by nature, glues the paper together.”
The pads will be sold at Shs2,000 a packet. The papyrus is harvested in swamps near Sezibwa River. The net placed on top of the pads is imported from China using the Saccos savings. The equipment in the factory is a donation from the Swiss League.
“The factory only employs women in its operations and we believe these are sustainable pads because disposing them is easy since paper and papyrus can easily burn,” Mulumba says.
KADCOS also runs medical camps in the sub-parishes in partnership with HDW.
The unique challenges Saccos face
The fact that you only have to be a member and saver for three months to get loan, means that the number of loan defaulters in the Saccos is high. It does not help matters that the loans should be repayed in only 18 months, with an interest of 2.5 per cent per month.
Ms Sarah Nansalire, the manager of Munaku Kaama Sacco, says, “To make ends meet, many of our members borrow from different Saccos so they have a hard time paying back the loans in time. Currently, the government policy is that spouses have to consent to their partners taking loans. The problem is that many men want to take loans in secret, yet they have to offer collateral they jointly own for those loans.”
The Saccos rely on only their members’ savings and share capital because they are reluctant to get external loans fearing that the banks will force their agenda onto the Saccos.