NICHOLAS A
The Rukungiri District Commercial Officer, Ms. Tayebwa Grace, has challenged members of Savings and Credit Cooperative Organizations (SACCOs) to prioritize increasing their savings and share capital instead of focusing more on borrowing.
She made the remarks during the 22nd Annual General Meeting of Buyanja SACCO Limited held at Kabale University’s Rukungiri Campus in Buyanja Sub-county, Rukungiri District.
Ms. Tayebwa’s appeal followed concerns raised by the SACCO’s Board Chairperson, Canon Yosia Twirire, who revealed that the institution is currently grappling with liquidity challenges. He explained that the demand for loans among members is significantly higher than the funds mobilized through savings and share capital.
According to Canon Twirire, this imbalance has forced the SACCO to borrow funds from commercial banks and institutions such as the Microfinance Support Centre in order to meet members’ loan demands. He noted that such borrowing increases operational costs and exposes the SACCO to financial pressure.
Ms. Tayebwa warned that it is risky for a SACCO to have loan demand exceeding members’ contributions. She emphasized that reliance on external borrowing often results in higher interest rates, which are eventually passed on to members. She encouraged members to strengthen their financial base by increasing savings and share capital so the SACCO can operate sustainably using its own funds.
The SACCO’s General Manager, Ms. Nayebare Oliver, assured members that interest rates on loans would reduce once savings and share capital improve. She attributed the current interest rates to the cost of borrowing from larger financial institutions, stressing that improved internal capital would ease this burden.
Canon Twirire reported that Buyanja SACCO currently has 17,737 members. The SACCO’s share capital stands at 3.85 billion shillings, while savings amount to 9.74 billion shillings. The loan portfolio has grown to 18.36 billion shillings. He noted that although membership is steadily increasing, growth in savings and share capital remains relatively slow compared to loan demand.
Looking ahead, the SACCO plans to introduce new initiatives, including a Water, Sanitation and Hygiene (WASH) loan product to support members in improving domestic facilities. Other planned measures include removing compulsory savings requirements on emergency loans and strengthening compliance with anti-money laundering and counter-terrorism financing policies for all shareholders during deposits and withdrawals.
Among the achievements highlighted was the introduction of new financial products such as WASH loans, Bakyara Muzahura unsecured loans, biogas, dairy and horticulture loans. Membership has increased from 11,738 in 2023 to 14,174 in 2024.
Some members have expressed satisfaction with the SACCO’s impact on their livelihoods. One delegate, Mr. Turyahikayo Peter, said that since joining the SACCO in 2012, he has experienced steady progress in his personal development. He credited the SACCO for enabling him to educate his children and invest in income-generating ventures such as boda bodas and a tuk-tuk, which have contributed to his economic growth.
Leaders concluded the meeting by urging members to remain committed to saving regularly and increasing their share capital to ensure the long-term stability and growth of Buyanja SACCO.
