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

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Membership All SACCOs, both those that received an external credit and those that did not, experienced a growth in total membership over a one-year period. Percentage increases of membership ranged from 24% (ZEU SACCO) to 274% (Ikongo SACCO). The average increase in membership over the defined period for SACCOs that accessed external credit was 87% while the average for the control group was 60%. The average increase in membership for SACCOs receiving loans was 548; the average increase for the control group was 708. Total Assets WOCCU recommends SACCOs experience a growth in total assets that is more than the inflation rate. Over the last six years, the inflation rate has fluctuated between -.32% and 7.83%. 9 In general, total assets increased for the SACCOs. However, Bushenyi People’s SACCO experienced a 23% decrease in total assets and Bunyaruguru SACCO saw a 4% decrease in its total assets from the year before the external loan was accessed to the subsequent year. The remaining SACCOs that accessed wholesale credit saw increases in total assets of between 95% and 229%. The average change in total assets was 91%. The control SACCOs, Kajara People’s and Bugongi, saw increases in total assets of 140% and 162%, respectively. The average increase in total assets for SACCOs receiving loans was UGX 24,492,855; the average increase for the control group was UGX 101,413,794. Total Savings The majority of total savings increased during the period. Bushenyi People’s SACCO saw a 87% decrease in savings while Bunyaruguru SACCO experienced an increase in savings of 29%, the lowest positive figure, and Kijura SACCO’s total savings increased by 401%. The average increase in savings for the SACCOs with wholesale funding was 57% while the control group saw an average increase of 121%. The average increase in total savings for SACCOs receiving loans was UGX 11,354,271; the average increase for the control group was UGX 46,702,614. Member Shares Member shares of the SACCOs with external credit did not increase across the board. Kijura SACCO experienced a decrease in member shares of 10%, although this was due to a nonstandard accounting practice, and does not accurately reflect the evolution of the SACCO’s assets. Bunyaruguru SACCO only saw an 8% increase in member shares while Panyimur SACCO’s member shares increased by 74%, the largest increase. The control group SACCOs experienced a much larger increase in member shares: Kajara People’s SACCO had an increase of 152% while Bugongi SACCO saw a 209% increase. The average increase in share capital for SACCOs receiving loans was UGX 2,740,082; the average increase for the control group was UGX 31,523,682. 9 http://www.mixmarket.org/en/environment/environment.show.profile.asp?CountryID=UG& The Effects of Wholesale Lending to SACCOs in Uganda 29
Total Outstanding Loan Balance Only one SACCO experienced a decrease in its total outstanding loan balance: Bunyaruguru SACCO (-31%). The remaining five SACCOs with external funds saw increases in total outstanding loan balance. Ikongo SACCO, Kijura SACCO and Bushenyi People’s SACCO experienced huge increases of 504%, 598%, and 906%, respectively, while ZEU SACCO and Panyimur SACCO saw more modest increases of 81% and 89%, respectively. The total outstanding loan balances of the control SACCOs, Kajara People’s and Bugongi, grew 159% and 170%, respectively. The average increase in total savings for SACCOs receiving loans was UGX 22,417,176; the average increase for the control group was UGX 75,131,332. Overall Growth While expansion of individual statistics like total assets, savings and outstanding loan portfolio may give the impression of growth, it is important to consider the collective change of statistics over time. For example, an increase in membership may appear a good indicator of strength but is it as strong if total savings simultaneously decreases? The following graph shows the average growth in total outstanding loan balance, total savings and share capital for the six SACCOs that received wholesale credit and were able to produce some financial information. The graph also presents the same statistics for the two control SACCOs that produced financial data. While the average changes for all the SACCOs are positive, over the one-year period the control SACCOs show a larger increase in total outstanding loan balance (170%), total savings (121%) and member share capital (172%). Figure 1: Average Changes in SACCO Statistics Over One Year Period Amount (UGX) 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 Average Changes in SACCO Statistics Over One Year Period Before After The Effects of Wholesale Lending to SACCOs in Uganda Non Borrowing SACCOs Borrowing SACCOs Share Capital- Sample Total Savings- Sample Total Outstanding Loan Balance- Sample Share Capital- Control Group Total Savings- Control Group Total Outstanding Loan Balance- Control Group 30
Page 1 and 2: The Effects of Wholesale Lending to
Page 3 and 4: © Financial Sector Deepening Proje
Page 5 and 6: LIST OF ABBREVIATIONS ADF African D
Page 7 and 8: SUMMARY This report presents the re
Page 9 and 10: MSC receives funding for its projec
Page 11 and 12: Uganda. In early 2006, FSDU circula
Page 13 and 14: epresent four rural regions of Ugan
Page 15 and 16: The data collection instruments are
Page 17 and 18: FINDINGS The findings presented in
Page 19 and 20: At the time of SACCO selection, Buz
Page 21 and 22: more shares every time they apply f
Page 23 and 24: Panyimur SACCO has offered, and con
Page 25 and 26: in 2006. ZEU SACCO is focusing on r
Page 27 and 28: MEMBER PERCEPTIONS These findings r
Page 29: some members improved their repayme
Page 33 and 34: Bugongi SACCO, on the other hand, s
Page 35 and 36: purchase additional shares for ever
Page 37 and 38: Focused Community SACCO attributes
Page 39 and 40: produce regular performance reports
Page 41 and 42: committees now successfully coordin
Page 43 and 44: 7) Effective Expense Control. A SAC
Page 45 and 46: APPENDIX II: STEERING COMMITTEE MEM
Page 47 and 48: Fred E.G. Mwesigye Commissioner for
Page 49 and 50: APPENDIX IV: INTERVIEW GUIDE - SACC
Page 51 and 52: APPENDIX V: INTERVIEW GUIDE - SACCO
Page 53 and 54: APPENDIX VI: INTERVIEW GUIDE - SACC
Page 55 and 56: APPENDIX VII: INTERVIEW GUIDE - SAC
Page 57 and 58: Balance Sheet: Assets Loans to memb
Page 59 and 60: APPENDIX VIII: BUNYARUGURU SACCO GR
Page 61 and 62: APPENDIX X: KAJARA PEOPLE’S SACCO
Page 63: AMFIU Association of Micro Finance

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