The cooperators in Northern Uganda with UCA staff and ministry of state for cooperative during consultative meeting on the establishment of national cooperative bank in Gulu City. Photos by Walter Okot
By Walter Okot
Gulu: The Uganda Cooperative Alliance (UCA) Limited has started engaging cooperative leaders in Uganda to raise money to revive the cooperative bank.
Cooperative Bank was established in the early 1960s as a main source of credit facilities for farmers in Uganda before its closure in May 1999 with 23 branches countrywide.
Ivan Asiimwe, the general secretary of UCA, said they are planning to hold regional meetings to get advice from cooperators and lobby funds to reopen the bank that will be named National Cooperation Bank.
In Acholi, Lango, West Nile, and Karamoja sub-regions, consultative meetings were held for two days at Global Friendship Hotel in Gulu city with cooperators representing the Cooperative Unions, Area Cooperative Enterprises, Savings and Credit Cooperative Organizations, water and environment Cooperatives, Energy Cooperatives, Parish Development Model and Emyooga SACCOs.
Asiimwe noted that as much as the country has several banking and microfinance institutions, access to affordable loans remains a challenge for smallholder farmers.
Asiimwe said they would soon hold a national consultative meeting in Kampala with academia, researchers, and the Uganda Bankers Association on establishing the bank well.
There are several agricultural credit finance for smallholder farmers, however, there are complaints about the long procedures that limit access to the loans.
Financing the bank
Asiimwe said cooperators need to raise Shs150bn, a minimum capital requirement set by the Bank of Uganda for the establishment of a bank.
“If the 50,000 registered cooperatives accept to combine their resources, then we can establish our bank. This system worked well in the Netherlands and Kenya,” Asiimwe said.
Asiimwe requested the government for financial support toward the establishment of the bank either in debt, equity, or venture capital.
Robert Omoding Odeke, the national steering committee for the establishment of the cooperative bank, urged leaders of cooperatives to always insist on using the established regulations or legal guidelines in the management of their establishments, guidance in financial and social audits, management, and other legal requirements to avoid running their cooperatives into legal ditches or collapse.
Frederick Gume Ngobi, the Minister of State for Cooperatives, said he was given a period by the cabinet to get resolutions from cooperators and present them before them so that they can start the actual foundation of laying the national cooperative bank.
Ngobi advised the cooperators to walk the talk by contributing Shs300b to establish the cooperative bank.
He explained that the bank would save the borrowers, the majority of whom are farmers, from high interest rates charged at 23% by other banks.
Frances Jane Amongin Okili, Gulu City resident commissioner, encouraged the youth and women to join cooperatives and warned SACCO leaders to stop corrupting group savings which makes people shy away from the groups.
Resolutions by cooperators
During the consultative meeting, cooperators resolved to start and operationalize a bank to provide access to affordable and appropriate finance, contribute to the required minimum capital and other funding for the bank to become operational.
They also resolved that UCA would spearhead the establishment and operationalization of the bank, and that part of the money the government is paying to cooperative unions as war loss compensation, be transferred for the establishment of the cooperative bank.
It was also resolved that the National Steering Committee would engage the government to provide seed capital for the cooperative bank among others.
