Government has challenged farmers to strengthen their savings and credit cooperative societies (SACCOs) instead of crying for the revival of the cooperative bank.
The state minister for cooperatives, Fredrick Gume Ngobi says farmers through their SACCOs can decide the better interest rates which is not so different with having the cooperative bank.
His remarks follow calls by many Ugandans, especially farmers, that government revives cooperative banks so that it is easy to get a loan at a low interest rate compared to other commercial banks.
However Ngobi says that government is working hard with the Uganda Coperative Alliance to ensure that the SACCOs are strengthened.
Getrude Achariot Abunyang, a fruit farmer in Omodoi sub-county in Katakwi district, argues that reviving the cooperative bank is also relevant even with the presence of SACCOs.
From: New Vision
In October 2009, the then Minister of State for Trade, Mr Nelson Gagawala Wambuzi, announced that government had set into motion plans to revive the defunct Cooperative Bank.
“The Government is going to re-finance the Cooperative Bank and intends to purchase tractors and lorries for Cooperative Union members as loans. These loans will not be paid to the Government, but to the bank,” Mr Gagawala Wambuzi said.
The minister, who was speaking at Hotel Triangle in Kampala during the annual general meeting of the Uganda Cooperative Alliance (UCA), an umbrella organization that brings together all the country’s cooperative unions.
UCA had been the biggest shareholder in the Bank which had been formed in the 1960s, but was wound up in 1998 amid a host of problems, including mismanagement, fraud, poor credit policies. and practices and appointment of incompetent people into senior management positions.
Other problems that plagued the bank in the run up to its closure included government interference, insider lending and failure by the Bank of Uganda in its supervisory functions over the bank.
Minister Gagawala Wambuzi’s announcement was in response to demands by UCA members for a government statement on the fate of their institution.
East African Business Week recently reported that the Ugandan government will be investing in developing co-operatives. Many co-operatives in Uganda have become stagnant or failed because there is a lack of general know-how in running co-operatives, as well as limited access to value addition technology hindring their development.
KAMPALA, UGANDA - Limited access to appropriate technology for value addition by the cooperative societies in Uganda has been cited as a major hindrance to their development.
“Some of the cooperatives in the country are not performing at their best especially in adding value to agricultural products, because of inadequate access to appropriate technologies required in the value addition chain,” Amelia Kyambadde, the trade, cooperatives and industry development minister said recently.
“Other cooperatives are stagnant due to low capital contribution by members. However as Government we are working very hard to see that cooperatives perform better,” she said
She also mentioned gaps in the general know-how of how to run cooperatives. Kyambadde said although the number of registered cooperatives societies is increasing, the majority are struggling.
Kyambadde told a news conference the government will start training programmes to develop leadership skills and support cooperatives in accessing quality technology.