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New Digital Tool to Rid Cooperatives of Rot in Data, Corporate Governance :: Uganda Radionetwork

New Digital Tool to Rid Cooperatives of Rot in Data, Corporate Governance

Uhuru Institute says cooperatives manipulate data to access aid like grants and other incentives from the government or other sources, which in the end leads to wrong decisions made by authorituies.

Audio 5

A study by a think-tank on Uganda’s cooperative movement has revealed that poor corporate governance and data management are major hindrances to its development and relevancy to the national economy.

It revealed that the organizations, right from cooperative societies at the grassroots through to the tertiary organizations, either do not have accurate data or are still keeping data on pieces of paper and in paper files.

This has also made it easy for most of them to alter their reports to suit the need at hand, according to the Uhuru Institute for Social Development and the Busara Center for Behavioral Economics.

The study over the last year was done with the idea of developing a system that would help cooperatives improve the way they do business, and increase their benefit to members, which led to the development of the Coop Profiler.

This, according to Baker Ismael, the Head of IT at Uhuru Institute, is a digital tool that helps a cooperative track the numbers of members, their physical locations, and economic activities, among other vital data.

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However, the Coop Profiler is also important to the people who deal with the cooperative movement, including customers, regulators, and planners.

So, the tool is also capable of keeping a record of the organization from the time it was established to the current time, regaining its performances, governance structure and changes, membership structure, and overall outlook.

Ismael says this can then help those responsible for the health of the cooperative movement to determine how to approach tasks.

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The tool also has a measurement of how the different cooperatives perform, dubbed the Cooperative Resilience Measurement Index, to keep track of the health of the cooperatives sector.

This, according to Jane Amuge Okello, the Principal Investigator, the Index helps them recommend what can be done better by both the management of the cooperatives and the authorities to improve governance and regulation.

Amuge says that over the exercise, they discovered that the data kept by cooperatives is very vulnerable to doctoring by the leaders, which results in the making of wrong decisions by the responsible state and other authorities.

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According to her, the doctoring of information is usually driven by the urge to access aid like grants and other incentives from the government or other sources, and this is done with the collaboration of dishonest audit firms. 

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She also criticized the current regulatory system which involves manual operations including physical movement of data between the cooperatives, most of which are in rural areas, and the regulators like the ministry and the Uganda Microfinance Regulatory Authority, based in Kampala.  This, according to her stifles their growth.

The move will also be able to align the information at the various cooperatives with that in the various government departments in including the Uganda National Bureau of Standards, so that the movement can be ably represented in the national statistics.

But, according to Amuge, it also helps the sector to be able to compete with other sectors as has been the case in other countries that adopted better data management earlier.  

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In their advice, the two organizations urged cooperatives and their leaders to understand the need to go with the trends in digital-based data management, but also the changing demands of the market and demographics.

Currently, they say, most members of the cooperative movement still find it easier to entrust leadership to the older generations and this has kept the younger persons, with their innovative minds, away from the movement’s leadership.

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