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.

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