Ugandan Police are investigating four savings and co-operative credit organisations (SACCOs) suspected of fraud. They are alleged to be cheating their clients and making withdrawal of deposit money very difficult. The organisations are Front Page Micro Finance, Faster Micro Finance, Savings and Credit Cooperative Society Support Uganda Finance Limited and Stade Rugando Finance, all based in Kampala. According to the police up to 50 people have made complaints against the firms, accusing them of refusing to fulfill withdrawal requests completely and offering high-value loans against low-value collateral. Kampala Extra Region Police Spokesman Simeo Nsubuga said, “We have summoned the bosses of these institutions and they have recorded statements at CPS (Central Police Station) in Kampala. We are investigating them and their institutions. So far no charges have been preferred against them because the cases are still under investigation.” As a result there are reports that hundreds of clients of the largest firm under investigation, Front Page, flocked to their offices to withdraw their money.
Uganda’s SACCOs are a rapidly expanding network of credit unions that have developed to provide finance to low-income households. There are now approximately 2,000, 40% more than in 2000. Of these, 1,400 are fully registered while 600 are on probation. However, a report by the Consultative Group to Assist the Poor (CGAP) in 2005 reported that overall access to financial services is still very low in the country, with only 4% of the population saving with SACCOs.
The World Council of Credit Unions (WOCCU), a worldwide development agency supporting credit unions, claims that one of the biggest challenges facing Ugandan SACCOs today is the lack of a legal framework and supervisory system that can help protect member savings and generate confidence. They are working with the Ugandan government to prepare all Ugandan SACCOs for government supervision to develop the credit union legislation and regulation that are currently lacking.
To learn more about this author, visit David Satterthwaite's Website.
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David Satterthwaite
(Visit David's Website)
David brings 10 years of experience in
microfinance management, social
entrepreneurship, non-profit
management/fund-raising and microfinance
investment research.
David is the Chairman and President of
Prisma Microfinance, Inc., a retail
“microbank” operating in Central America.
He is also Chief Editor of
MicroCapital.org, a news and information
service for the microfinance community and
its investors. Each month,
MicroCapital.org publishes the
MicroCapital Monitor, the leading industry
newspaper.
David writes and speaks frequently on
microfinance. He has been a quest speaker
at many events, including: Microcredit
Summit 5+: Panel on Private Investment,
Milken Institute Global Conference, United
Nations Year of Microcredit Symposium for
Wall Street, Chicago Conference on
Microfinance, Harvard Social Enterprise
Conference, Dartmouth’s Business
Sustainability Conference, Wharton’s
Conference on Social Entrepreneurship,
Stanford’s Social Enterprise Club,
Columbia’s Social Enterprise Program and
the Net Impact Annual Conference. Through
his work with Prisma and MicroCapital, he
has been featured or quoted in The Wall
Street Journal, the Boston Globe, “All
Things Considered,” Reuters and
SocialFunds.com. David has been
recognized with the Compaq Computer
Corporation Leadership Award, the City
Year Inspiring Leader Award and the
National Social Venture Business Plan
Competition award for Best Social Impact
Analysis.
David has supported many non-profit and
for-profit social enterprises in different
capacities, including Access Technology
Learning Center, Agora Partnerships,
Bridges to Business, City Year, Fonkoze,
Kiva and National Social Venture
Competition.
David holds a B.A. with Honors in
Political Science from Haverford College.
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