According to Kasolo, many small and midsized enterprises are struggling to operate or even failing to break through, mainly due to a lack of reliable sources of affordable credit facilities to support their growth.
Minister in Charge of Microfinance; Haruna Kyeyune Kasolo is mooting for the establishment
of a cooperative bank to save small enterprises the burden of exploitation
under the high-interest credit facilities.
Kasolo, many small and midsized enterprises are struggling to operate or even
failing to break through, mainly due to a lack of reliable sources of affordable
credit facilities to support their growth.
addressing a local council leaders’ sensitization meeting in Masaka Lwengo
district, on the Presidential Wealth and Job Creation initiative, commonly
known as Emyoga, Kasolo revealed that his Ministry is considering establishing
an apex bank for all cooperative societies and unions, as a solution to the long
bureaucratic tendencies and high-interest rates embedded on loans offered by
He indicates that their assessments have established that besides that the
exorbitant interest rates, many micro and midsized business operators are also
frustrated by the high-value collaterals, among other inconsiderate conditions
on the loans obtained from the commercial banks.
Kasolo prefers that it's high time the different cooperatives are mobilized
into their own bank, which will meet their credit and capital needs and provide
a direct link through which government can capitalize on them.
Records at the Uganda Cooperatives Association indicate that by the year 2021,
Uganda had 18,000 registered cooperative societies with a membership of at
least 7 million people. The majority of these cooperatives operate as Savings
and Credit associations on top of other benefits of collaboration that they
present to the membership.
Kasolo once these groups are organized into a cooperatives bank, it can provide
the government with a better alternative through which it can channel all its
capitalization initiatives targeting the ordinary people.
that apparently some of the funds that the government commits to some capitalization
programs such as the Agriculture Credit Facility-ACF and the Youth Venture
Capital Fund-YVCF, remain unutilized in the commercial banks as a ploy to
exhaust their own internal credit facilities.
//Cue; “banka eyabamufuna mpola….
Cue out; …..amagoba amatono.”//
Kitatta, the Lwengo LCV Chairperson says the idea is long overdue indicating
that many cooperative societies at grassroots levels have been devoured by
commercial banks and other exorbitant money lenders to whom they are currently
running for credit.
optimistic that once well organized and substantially supported with a robust
regulatory framework, financial resources, and training, the cooperatives are a
potential vehicle for rural economic transformation.
“all we need….
Cue out; …..almost at no interest,”//
Cooperatives Bank once operated in Uganda since the 1960s but closed shop in
1999 after the government adopted a major economic policy shift to privatization
in what is famously known as Structural Adjustment Programs that was agitated
by the World Bank and the International Monitory Fund.