For men and women in southern Karamoja in northeastern Uganda, accessing financial services is a challenge. Few financial institutions exist there, and the only banks are in the Moroto district, forcing those in neighboring districts to travel long distances to access them. The USAID-funded Resilience through Wealth, Agriculture and Nutrition (RWANU) project, implemented by ACDI/VOCA, helped local communities establish their own village and savings loan associations (VSLAs).
“The VSLA has helped me a lot,” said member Angelina Achia. “I got a loan from the group to pay for my tuition for the last two semesters at the university.” Angelina and her sister started a produce business, which enabled Angelina to pay off her loan in time.
However, the VSLAs lending threshold of US$300 proved too low for many businesses hoping to scale up. To help them access sufficient credit, RWANU trained the VSLAs to transform into larger-profile savings and credit cooperative organizations (SACCOs). Despite participating in trainings on financial management, record keeping, and more, many members hesitated to join.
“It was hard to convince people to join the SACCO because most of them were members of the Namalu SACCO, which collapsed because of mismanagement, and they were scared.” – Sacarin Luwomo, secretary of the Loregae Farmers SACCO
Others, like Angelina, had seen the benefits the VSLAs provided and were easily convinced. “When RWANU talked to us about SACCOs, I was very excited to join. I knew it could help me even more than the VSLA. I even volunteered on the interim committee as the treasurer,” she said.
Until recently, all eight subcounties in the Nakapiripirit district had SACCOs except Loregae.
“You couldn’t get money easily. We had to go all the way to the bank in Moroto, and, when you go to Moroto, you have to plan transport as well as somewhere to sleep if it gets late,” Sacarin said.
In January 2017, the Loregae Farmers Savings and Credit Cooperative formally registered with the Uganda Ministry of Trade Industry and Cooperatives and held its first annual meeting in April with 50 members. The group moved into new offices and voted on a board. Soon they will hire technical staff and begin using mobile money services to cut down on transportation costs.
“We will not collapse like other SACCOs because RWANU taught us how to manage SACCOs financially, how to give and recover loans, how to manage members, and also how to do business as a group.” – Sacarin Lowumo, secretary of the Loregae Farmers SACCO
Thanks to RWANU’s support, the Loregae Farmers SACCO and two others attained legal status at the district and national levels. The project connects them with commercial officers in their districts and provides ongoing training to ensure sustainability and long-term success.
Since 2013, RWANU has empowered 424 VSLAs, made up of 6,000 women and men, in financial literacy. The five-year project funded by USAID’s Office of Food for Peace focuses on reducing food insecurity among vulnerable people and reducing malnutrition among pregnant and lactating women and children under five in southern Karamoja, Uganda. The project targets 16 subcounties in the districts of Amudat, Moroto, Napak, and Nakapiripirit.