SACCOs can boost financial Inclusion
There is optimism that as savings and credit cooperatives-SACCOs continue to register positive outlook in regard to savings and access to credit by rural folks, creation of a SACCO cooperative Bank would bolster the inclusion efforts.
The savings and credit cooperatives registered a positive outlook in mobilizing savings that grew to Rwf 36.7 billion by December last year up from Rwf 6.3 billion in the same period under review in 2010.
With this growth, experts believe that establishment of the cooperative bank would increase liquidity to Saccos thus boost inclusion as well as access to credit mainly in rural areas.
“In the future the establishment of a SACCO Cooperative Bank will play a critical role in financing projects for start-ups and growing SMEs to achieve self-reliance,” said Emmanuel Hategeka, Permanent Secretary in the Ministry of trade and Industry
The cooperatives , established by the government as one way of accelerating access to credit, increasing financial inclusion for the unbanked populations has seen its membership increase to over 1,6 million in 2013 up from 694,615 in 2010.
“Indeed, the Government of Rwanda views Cooperatives as a potential vehicle through which the Cooperatives members could create employment and expand access to income-generating activities, develop their business potential,” DamienMugabo,Director General,Rwanda Cooperative Agency said earlier
This implies that the bank first of all has enough liquidity as well as established linkages to the grassroots that is needed to trickle down financial inclusion mainly in loan disbursement to the growing household businesses.
Moreover, with the inclusion of Saccos to the Government, Business Development Fund, a fund that provides collaterals to banks for the fundable business projects they receive from borrowers, the Sacco bank would be vital in understanding the needs of the cooperatives.
Again, experts believe that the recent innovations within the cooperatives paves way for the bank as it would be able to match with the technological improvements in the banking system.
For, example, the Rwanda cooperative Agency set up a Web-Enabled Management Information System that helps to close the gap of access to information, as well as improving service delivery through the digitalization of services.
This, together with availing of computers to Saccos closes the gap of lack of technological innovations within the Saccos which has been hampering their service delivery, thus making populations shy away.