The Association of Microfinance Institutions of Uganda (AMFIU), a trade association, is to audit the Savings and Credit Cooperatives (SACCOs) in the country, in light of the recent financial scandals that have dented the public’s faith in these microfinance organisations.
The AMFIU was established in 1996 with the aim of stimulating private sector development, facilitating capacity building, and ensuring that Uganda participates fully in the global microfinance industry. It provides lobbying, consumer education and information analysis services.
During the recent launch of their transparency programme and consumer code of practice, the AMFIU said that they hoped to improve SACCO bad governance by training more managers and getting involved in the auditing of microfinance firms.
The necessity of such a programme has been evident in the last few months, as a number of firms have been investigated by the police and shut down, as reported by MicroCapital. Public disenchantment has been seen in theater performances where SACCOs have been satirised.
SACCOs are known for being insufficiently supervised, so the AMFIU’s decision to get involved will be seen as a step in the right direction. SACCOs are not regulated by the Bank of Uganda, unlike banks and microfinance institutions (MFIs). They only have to be registered with the Registrar of Savings and Credit Cooperative Societies, which has limited staff capacity and expertise, and yet they can take deposits from their members to lend-on to other members of the scheme.
The World Council of Credit Unions (WOCCU), a worldwide development agency supporting credit unions, is working with the Ugandan government to prepare all Ugandan SACCOs for government supervision, as well as to develop the credit union legislation and regulation that are currently lacking.
Amy Rennison, MicroCapital writer
Additional Sources:
MicroCapital
https://www.microcapital.org/?p=1435
AllAfrica.com:
http://allafrica.com/stories/200711210028.html
MixMarket:
http://www.mixmarket.org/en/partners/partners.show.profile.asp?ett=616
Microfinance Gateway:
http://www.microfinancegateway.org/resource_centers/savings/cgapsavings1/_assessments/_uganda
Similar Posts:
- SPECIAL REPORT: ¡Viva el Cooperativismo – A Powerful and Efficient Way of Helping One Another!
- MICROCAPITAL BRIEF: Kwara of Kenya Raises $3m in Equity to Boost Technology for SACCOs, Acquires KUSCCO Software Subsidiary
- MICROCAPITAL BRIEF: Credit Bank, FSD Kenya Engaging SACCOs in Effort to Reduce Remittance Costs for Rural Kenyans
- MICROCAPITAL BRIEF: Stanbic Bank Uganda, IFAD Seek to Reduce Costs of Remittances via FlexiPay E-wallet, Encourage Adoption via SACCOs
- MICROCAPITAL BRIEF: Cambodia Microfinance Association, NBC Launch Project to Increase Financial Literacy, Consumer Protection
