Museveni’s donations: How Nsambya Sacco used Shs270m

Shortly after the 2016 General Election, President Museveni went around Kampala City and its suburbs donating cash and equipment to artisans who engage in different trades, especially carpentry and welding.
The donations were widely viewed as an attempt by the President to court a constituency that had heavily rejected him, with Mr Museveni suffering the heaviest electoral defeat ever to Dr Kizza Besigye in the districts of Kampala and Wakiso.
A number of groups received donations worth billions of shillings then, and President Museveni two weeks ago went back to check on the groups to assess the progress they have made since. A number of the groups received fresh provisions of cash and equipment.

Museveni donation
In September 2016, Mr Museveni, accompanied by Ms Nakiwala Kiyingi, the State minister for Youth Affairs, donated Shs270m to Nsambya Carpenters and Crafts Sacco (NSACARJA) with the view of empowering them economically. Of this sum, Shs170m was in form of equipment, while Shs100m was given to them in cash in the bank.
The leadership of the Sacco decided a criteria to loan out the money to the members. Carpenters were required to form groups of four, with each member given Shs500,000 on condition that if any of the members failed to pay back the money, the other members would pay back the sum. They were also supposed to first make a saving of 10 per cent of the sum they wanted to borrow and also be members of the Sacco, having paid a membership fee of Shs35,000.
A 16-member loan committee was formed from among the carpenters to vet applicants for loans and weed out those who did not have stock. This was to help the committee to know the actual capital base and evaluate how much they could borrow.

Beneficiaries
Esther Nabikolo owns a carpentry workshop on Ggaba Road. She borrowed Shs990,000 from the Sacco in October 2016, having made an initial request of Shs1m at 15 per cent interest rate. The loan was to be repaid in six months. To access the loan money, she had to present her work address, provide details of capital base after which a loans officer visited her premises and evaluated her business.
“I paid savings of Shs100,000, bought shares at Shs300,000 and paid Sacco membership fee of Shs35,000 and thereafter received the money,” Ms Nabikolo says.
She has not yet fully repaid the loan but says she will be able to complete the repayment “soon”.
Samuel Kahandi is another beneficiary of the project.

“I got Shs490,000 from the initial request of Shs500,000, having paid Shs75,000 as collateral security and Shs33,000 Sacco membership fee. I still owe the Sacco Shs170,000. But this was Museveni’s money meant to help us not the leaders [of the Sacco] who have swindled the money,” he says.
“We still want money but the Sacco doesn’t have money, we want to know how the profits are being used,” Mr Kahandi adds.
Out of 191 people who got micro loans out of the money, including Ms Nabikolo, and Mr Kahandi, 72 of them have not yet fully paid back the money. Mr Armstrong Byakubo, the chairperson of NSACARAJ Sacco, says they have managed to get Shs32.2m back from carpenters, with Shs58.3m still unrecovered. He says some of the money they receive back as loan repayments has since gone to maintenance of equipment and acquisition of a kiosk for the office in which they operate.
Saturday Monitor checked the Sacco’s monthly ledger, which shows that the furniture machines have been able to generate savings worth Shs1.3m. They charge between Shs200 and Shs20,000 per user depending on what type of wood work one wants done. The machines include a compressor, planing machine, circular saw and spindle molder.

Money diverted
When the President donated the money, the objective was for the carpenters to expand their businesses and be able to earn more money in the future. But a number of beneficiaries used the money they borrowed to do other things.
Mr Byakubo, the Sacco chairperson, is happy that he borrowed Shs6m, which he says he used to build a house on a plot of land he had acquired in April 2017.
“I am grateful to the President because I used to rent but now I stay in my own house. I have paid back Shs4.8m and will complete the debt,” Mr Byakubo says.

Mr Kahandi, on the other hand, says he used the money to pay school fees. He says he has 10 children. “I had bigger problems to solve, so it [the money] came at the right time.”
Ms Nabikolo says she invested the money in another venture she is reluctant to name, but the money was allegedly stolen.
Another beneficiary, Mr Musa Namunyu, borrowed Shs500,000. Since he had initially asked for Shs1m and the venture he wanted to invest in required that much, he says he found himself squandering the Shs500,000 because it was not enough for what he wanted to do.
Mr Byakubo says the workshop has some youth that have been able to pay their tuition using the borrowed money. He says others have expanded their businesses and increased their capital base.

Many miss out
Out of the targeted 2,000 people who work in the premises, only 191 individuals accessed loans in the first phase. Talking to some of those who missed out on the money, the picture that the money left the community divided quickly emerges.
A number of them accused the Sacco administrators of being discriminative while selecting whom they give the loans.
Mr Robert Mulera says he paid Sacco membership fee and bought loan application forms but he failed to acquire a loan from the Sacco on three occasions. This, he says, demoralised him and he gave up on the money.

“I wanted between Shs3m and Shs5 million but the Sacco managers told me the Sacco didn’t have that amount,” Sula Masiga, another member who has failed to get a loan, says.
Another member, Mr Iddi Mabeddi, says he frequented the Sacco office for about six months after paying membership fees and accumulating savings of Shs120,000. He says he wanted to get a loan of Shs800,000 but he failed.
A number of members say different people paid inconsistent sums for the same requirements. For instance, Ms Nabikolo says she paid Shs35,000 as membership fee, while Mr Kahandi says he paid Shs33,000 for the same. Mr Mulera says he paid Shs33,500 as membership fees.

Debt collection
Mr Byakubo says the Sacco has not been able to generate enough money from loan repayments because many of borrowers have not fully serviced their loans.
He says at some point, they had to involve bailiffs and police to get members to pay back the money, but that this approach was discouraged by government officials. He says as a result, the Sacco has since run out of money to lend out.
Speaking to a number of the members, it is clear that they believe that the President gave them the money as a token after a hotly contested election, either as a way of wooing them to his side or to thank those who voted him in 2016. They, therefore, do not feel compelled to pay back.
Such was the fate of what was called Entandikwa Credit Scheme of the mid to late 1990s, where many people who borrowed money from the government programme did not pay it back because they believed the President was rewarding them for voting him in 1996.