SACCO promote sustainable development in Uganda

By Emmy Paul Opolot

SACCOs, short for “Society of Savings and Credit Cooperatives”, stand as one of the vibrant pillars of Uganda’s sustainable development in the national plan. Having immersed myself in these structures of the cooperative movement for over 17 years, I have witnessed firsthand their transformative power within communities.

From fostering financial inclusion to promoting gender equality and strengthening educational and health services, cooperatives have become a catalyst for comprehensive development across the country of Uganda.

Firstly, let us recognize the diverse landscape within which cooperatives operate in Uganda. These cooperatives operate in various sectors, including agriculture, transportation, savings and credit, housing, institutional and multi-use cooperatives, each serving specific community needs. These cooperatives serve as vital conduits for providing financial products and services, thereby uplifting their members economically and socially.

One of the most notable contributions of cooperatives is the provision of affordable capital and loans, enabling members to venture into various businesses and meet their essential needs such as school fees, food, clothing and healthcare expenses. Additionally, these credit societies instill a culture of savings among their members, promoting financial discipline and resilience, essential for sustainable economic growth.

In terms of financial inclusion, cooperatives such as SACCOs play a vital role, especially in rural areas where traditional banking services may be scarce. Despite such challenges, strategic partnerships and technological innovations have propelled SACCOS to offer more convenient access to finance, empowering its members to manage their finances effectively.

A prominent example of the impact of cooperatives and groups on individual lives is the story of Charles Odongo Omona, a 28-year-old youth from Orom sub-county. Charles, belonging to the RIBEAYETEKO group, used SACCO funding to grow gardens.

With funds from the cooperative and support from the Emyoga program, Charles successfully planted twenty-five acres of cotton, five acres of corn, and five acres of soybeans last year 2023. This initiative not only generated income for Charles but also contributed to local economic growth. and food security, demonstrating the tangible benefits of cooperatives in empowering people to realize their potential and contribute to community development.

Additionally, these cooperatives have played a critical role in advancing gender equality, particularly in traditionally male-dominated sectors.

Historically, women faced barriers to accessing or joining cooperatives due to lack of collateral, limited understanding of financial systems, and cultural limitations. However, recent surveys, including one carried out by GIZ under the Financial Systems Development (FSD) programme, indicate a significant change. Currently, women make up 30% of SACCO members, a notable improvement from previous years.

This increase can be attributed to specific interventions, such as gender mainstreaming initiatives, group lending methodologies, and efforts to improve women’s financial literacy and confidence. By actively involving women in cooperative governance and decision-making processes, cooperatives not only promote economic empowerment but also foster social inclusion and gender parity within communities.

The impact of cooperatives extends beyond financial services, penetrating the education and health sectors. Members can easily access loans for educational purposes, with favorable insurance packages and health camps that ensure affordable healthcare services for communities. Cooperatives also invest in human capital by offering scholarships for medical training, thereby addressing critical gaps in the delivery of healthcare services.

However, cooperatives face several challenges in their mission to drive sustainable development. Competition from larger financial institutions, liquidity management issues, and high default rates among members pose significant obstacles. To overcome these challenges, cooperatives must adopt aggressive marketing strategies, diversify funding sources, and strengthen leadership and governance structures.

Looking ahead, cooperatives must embrace digital technology to improve efficiency, transparency and accountability. By leveraging digital platforms to inform their operations, savings, loan applications, and member interactions, they can optimize operations and better serve the needs of their members. Additionally, set strategic goals for digitalization and foster a culture of mutual support and self-help to ensure they remain relevant and resilient for years to come.

In conclusion, cooperative societies are beacons of hope and progress in Uganda’s path towards sustainable development. Promoting financial inclusion, empowering women and youth and investing in education and healthcare. Cooperatives are not only financial institutions but agents of positive change within communities. As we face the challenges ahead, let us harness the collective power of cooperatives to build a brighter, more prosperous future for all Ugandans.

the writer is Emmy Paul Opolothe Linked Banking Manager, Commercial Banking Division, in Centennial Bank.