Effects of Wholesale Lending to SACCOs in Uganda - Rural Finance ...

FINDINGS
The findings presented in this section result from our experience in the field and from
interviews conducted with various SACCO experts, wholesale lenders, apex institutions and
donor agencies in Uganda. In many instances, the data collected in the field were
inconsistent and inadequate. Generally, the financial data kept by SACCOs proved to be the
most unsatisfactory. While the financial records kept by many individual SACCOs are
inaccurate and incomplete, we were able to fill gaps and test conclusions by conducting
multiple interviews within SACCOs, and compare records kept by the SACCOs with those
of the wholesale lenders. Also, some SACCOs have consistently kept good records over
several years. For this reason, the research team is confident that the findings presented in
this section are reasonably reliable and apply broadly to most institutions.
The findings show that wholesale credit affects SACCOs in a variety of ways. This section
will present the range of experiences observed in the field in order to provide a detailed
understanding of the effects of wholesale lending to SACCOs. The section also details
illustrative experiences of individual SACCOs.
The findings refer to the seven in-depth field visits conducted with Bunyaruguru SACCO,
Bushenyi People’s SACCO, Buzaaya SACCO, Ikongo SACCO, Kijura SACCO, Panyimur
SACCO, and ZEU SACCO. Where relevant, we include findings from the control group
visits to Bugongi SACCO, Focused Community and Kajara People’s. Further information
gathered in the five additional field visits to Kyamahunga SACCO, Muhame SACCO,
Nyaravur SACCO, Pakwach Nam SACCO and Shuuku SACCO is presented in text boxes
where relevant.
GENERAL FINDINGS
Introducing the SACCO to Wholesale Lending
In four of the seven SACCOs visited, the regional staff of the wholesale lender visited the
SACCO to introduce the concept of wholesale borrowing to either the SACCO manager or
Board of Directors. The representative explained the wholesale lender’s operations and
invited the SACCO to apply for a loan. Bunyaruguru SACCO’s BOD told us that if the
wholesale lender had not visited the SACCO, they would not have considered borrowing
external funds.
In the remaining three instances, the regional Private Sector Promotion Centre (PSPC)
introduced the idea of wholesale borrowing to the SACCO management or Board of
Directors. Each of the SACCOs we visited maintains a partnership with the PSPC and the
PSPC is often acknowledged for helping the SACCO form years earlier. The regional PSPCs
have formed relationships with MSC to help the latter promote wholesale borrowing among
the SACCOs.
The Effects of Wholesale Lending to SACCOs in Uganda
16