[2007-12-06]  Post Bank wants SACCOs
POST Bank Uganda has asked government to strengthen savings and credit cooperative organisations (SACCOs) as part of a wider campaign to ease access to Bonna Bagaggawale (Prosperity for All) funds.

The Managing Director, Mr Steven Mukweli while appearing before the Parliamentary Committee on Committee on Commissions, Statutory Authorities and State Enterprises on December 4, denied media reports that the bank lacks the capacity to handle the Bonna Bagaggawale [Prosperity-For-All].

"It's not true that Post Bank lacks capacity to manage the programme. It's only that our mandate is limited to 17 districts where we have branches. We cannot just give money to unapproved SACCOs as this would defeat the purpose," Mr Mukweli said.

Capital base
He clarified that the bank's capital base is Shs6 billion and not Shs3.4 billion as claimed earlier.
On accusations that he disrespected the Committee Mr Mukweri said: "I was reacting to a story and not the Committee report because I have not seen the report myself."

He added that the government has so far given Post Bank Shs500 million under the prosperity for all programme.

"This is the only money we have received so far. It's not true that Post Bank is holding money meant for the Bonna Baggawale scheme. It's just that we haven't received the money yet," Mr Mukweli said.

Asked about the challenges facing the programme, Mr Mukweli said the programme is not about micro credit alone but involve other components such as increased productivity, marketing and access to financial sources to enable borrowers to pay back.

"The biggest challenge is whether the SACCOs had the competence required to receive loans. People have to belong to SACCOs and the majority of our people have not yet engaged in any enterprise selection," Mr Mukweri said.

Legal framework
However, the Committee Chairperson, Mr John Odit (Erute South), said the government should put in place a legal and regulatory framework for the institutions before rolling out the funds.

"We need to ensure that the law is put in place to ensure that the operations of SACCOs remain prudent, sound and sustainable. We want this programme to succeed and logistical gaps should be addressed to expedite the process," he said.

Mr Mukweli reiterated that the bank plans to open more 17 other branches next year, raising their number to 34.
He said the government had agreed that the new districts not covered by Post Bank would be covered by other financial institutions.

"In spite of delays in releasing money, we have managed to lend some money to SACCOs. Post Bank has the capacity to run this programme in the areas where we have branches. We have trained linkage banking officers to appraise the SACCOs and recommend them for borrowing," he added.

He also dismissed claims that he had been receiving monthly housing allowance from the bank.
He said he is the substantive managing director and does not live in "staff quarters."

Source: © 2007 Monitor Publications Ltd