Every village  in Uganda  needs a Sacco

Monday September 28 2020

Jonah Kiberu

By Guest Writer

What model can the Micro Finance Support Centre (MFSC)adopt to develop Savings and Credit Cooperative Societies (Saccos) as a development route for Uganda? 

While I agree with the initiatives adopted by the government to develop Saccos in Uganda, there has been much effort put in Saccos operating in wider geographical scopes such as sub-county level, district level and those set up by groups of people with similar objectives, for example teachers, traders, farmers, soldiers and somewhere at regional level such as Project to Empower Women through Savings and Loans (PEWOSA) in the central region and others in the west. 
However, the notion of Saccos at village level has not been embraced as it would have been. 

Village citizens have always made their small Saccos in which they keep money in small boxes, with poor financial records or incomplete records. 
On many occasions, there have been cases of infidelity where those who are chosen as treasurers in these village group savings schemes end up embezzling the little money they have. 

This has been one of the reasons why such village Saccos do not register success. 
Besides this, they informally run under unprofessional management, amorphous membership and above all, they lack guidance and training, which would enhance their growth and expansion. 

While the government under the presidential initiatives to fight poverty in Uganda, would wish to develop Saccos, there is need to ensure that MFSC identifies all Saccos at village level to grow them through sub-county level to district level. 

Village Saccos should have an umbrella under associations of LC1 chairpersons, although these have not been there before. 
 I still re-emphasise the need for LC1 chairpersons to play a pivotal role in changing their societies but not simply being seen during times of signing land agreements or settling disputes. 


One way to develop their societies is by establishing village Saccos, where every citizen has to be a member. 
Yes, I agree with the fact that Sacco membership is voluntary, but then we lack the zeal for cooperation, working together and have a poor saving culture. 
Saccos should start from grassroots as they develop to wider coverages.

 The model should be formulation of village (V), parish(P), sub-county (SC), county (C) to form a district Sacco umbrella (D) under local government supervision (LG) that is; V+P+SC+C=D +LG. 

The monitoring of these Saccos becomes easy, as well as their funding from the Micro Finance Support Centre or any other agency. 

At the village level, people understand each other and can easily form groups. 
After forming these village Saccos, emphasis should then be put on massive sensitisation to encourage people to buy shares, save, borrow and continue paying periodical subscriptions to their Saccos to survive. 

This is not to say that MFSC should simply offer financial literacy to them. 
It is the role of MFSC to ensure that these Saccos start and survive sustainably.

 Otherwise, simply offering financial training to them cannot be a conclusive point for their growth. 
Saccos need a serious financial push to avail them with more capital and loanable funds but this should start from the village level.

 If this model is embraced, Uganda can realise a reduction of approximately 25 per cent in household poverty levels in just five years. 

Mr Kiberu Jonah is the director at Gateway Research Centre Uganda     jonahkiberus@gmail.com