Saving can help to lift Rwandans from poverty
Last week was dedicated as the Savings Week in Rwanda and worldwide, with a special focus on the role played by Savings and Credit Cooperatives (Sacco).
The week was characterized by the launching of Umurenge Savings and Credit Cooperative (Umurenge SACCO) in all the districts of the country, in each district the best performing SACCO was selected for the launch.
Speaking at the launching of “Kigali Solidarity for Vision SACCO” in Kigali Sector in Nyarugenge, the Minister of Finance and Economic Planning John Rwangombwa called upon all Rwandans to develop a culture of saving, if they are to attain real development.
“Saving should be a culture for every Rwandan so as to enhance our development, no country can develop without saving and no individual either,” he remarked, adding that every Rwandan today should work with the sole purpose of improving his social welfare and the only way to achieve this is through savings.
Umurenge SACCO is a financial institution under the cooperative form, which operates in the financial system;it is a legal entity in which individuals save their money and can get loans in order to invest in various activities such as Agriculture, Trade and provision of basic needs among others.
Its fundamental objective is to maximize the benefits which members can obtain from their transactions with the cooperatives.
According to Damien Mugabo, the director general of Rwanda Cooperative Agency (RCA), currently about 1.3 million people are members of Umurenge SACCO country wide. He says the numbers may sound impressive, but shows that there is still a long way to go.
The government of Rwanda started to think of establishing Umurenge SACCO in 2008, after carrying out a study that showed that 52% of Rwandans had no access to formal financial institutions and were keeping their money by traditional means such as digging a hole and burying their money, which proved to be dangerous because many were losing their money due to poor keeping. “Umurenge SACCOs reach out to members and areas that are unattractive to banks, they can provide access to members of the population who would not normally save in the formal sector and physically not access a classic financial institution, due to locality and deposit restrictions,” Mugabo said.
After examining that situation the government came up with a resolution of having at least one financial service provider in each sector, close to the people especially in terms of proximity because financial institutions were far from where they lived (people in villages were using the traditional ways because they found it very hard for them to move about 50km looking for classic financial institutions in towns to keep their money) and started Umurenge Savings and Credit Cooperatives. This was also recommended by the National Dialogue meeting held in December 2008,that agreed to the creation of at least one SACCO at the level of each administrative sector.
The director of Kigali Solidarity for Vision SACCO, Emmanuel Ngezahayo, said the organization currently has 1480 members in a sector where there is a potential of 12,000 savers.
Asked why some people seem to be reluctant of becoming members of Umurenge SACCO, RCA’s Damien Mugabo said one reason is the bad experience of 2006 when many people lost their money in micro-finance institutions (COOPECS) that were mushrooming everywhere but were badly managed, hence the people’s confidence needed to be restored. Yet he stressed that since 2009 Umurenge SACCO has registered good progress in terms of gaining new members and capital.
The current wave of launching Umurenge SACCO in all 416 sectors of the country is a way of mobilizing the population to save for the future but at the same time mobilize more members for Umurenge SACCO and the population to own it.
The government has been helping Umurenge SACCO to grow through providing expertise and building the capacity of people at the grass roots to manager them effectively.