They are, however, credited for promoting financial inclusion in Rwanda from 21% in 2009 to 92% with 40% in Umurenge SACCO alone in 2018, making Rwanda top Sub-Saharan Africa, according to Prof. Jean Bosco Harelimana, the Director General of Rwanda Cooperative Agency (RCA).
He told IGIHE on Tuesday that slightly over Rwf700 million is still missing from Umurenge SACCO’s coffers after recovering Rwf1,027,504,492, adding that 100 cases involving the cooperatives’ staff and accomplices are pending in courts while 25 cases have been tried since last year.
With 535 outlets, Rwf66 billion savings and Rwf12 billion share capital currently, Umurenge SACCO employs 3,029 people and 45% are women.
Prof. Harelimana said that the Central Bank (BNR) and RCA embarked on an inspection last year which has reached 169 Umurenge SACCO’s outlets, pointing out malpractices with 125 filed to courts.
“The inspection pointed out many challenges in Umurenge SACCO’s operations. There is a high rate of fraud and embezzlement; poor management of loan and other financial products; high rate of non-performing loans; mismanagement of members’ funds that leads to mistrust; non-compliance with laws, policies and internal guidelines in place,” he said.
Umurenge SACCO non-performing loans’ rate is at 16% now and stood at 12.9% in 2017 yet BNR allows a maximum of 5%.
Prof. Harelimana added that the inspection is behind the many cases reported last month whereby two former employees of Ndego SACCO were sentenced to eight years in prison and fined with Rwf9,767,420, two arrested for either embezzling or mismanaging Rwf55.3 million of Murundi SACCO in Kayonza District and two Nemba SACCO employees arrested for either embezzling or mismanaging Rwf15,811,500, among other cases.
Those currently facing the justice also include local leaders, other opinion leaders in their communities and two RCA employees for involvement in Umurenge SACCO’s malpractices.
{{Computerisation, cooperative bank as a solution}}
Reiterating the importance of Umurenge SACCO in promoting Rwandans’ welfare, Prof. Harelimana said the government has decided to improve their operations and management by making services computerised and creating a cooperative bank to oversee the outlets’ operations around the country.
“There are serious loopholes in the operations because SACCO’s services are using analog methods, with handwritten records. It is easy for the tellers to intentionally record Rwf500,000 for someone who deposits Rwf5 million and steal the balance. Making SACCO computerised will solve this problem and we want to start a cooperative bank by 2020 which we can’t have with the current manual operations,” he said.
He said that RCA and BNR are doing data screening in Umurenge SACCO to collect data that will help with the computerisation of operations which will see the outlets consolidated to allow members access services wherever they are in the country.
The plan has been there for long but Prof. Harelimana said that they were disappointed by the contractor who had to develop the software but has failed and RCA terminated the contract last week.
“We are looking for other people who will give us home-grown solutions for SACCO. Software development may take a year and we shall, thereafter, start to put them in all outlets in 2019 to make a way for a cooperative bank. I encourage all citizens to use SACCO products to improve their livelihoods. There is no shortcut from poverty to wealth; these micro-finance institutions are the way to go for those with poor means,” noted Prof. Harelimana.
He assured Umurenge SACCO members of the security of their funds because all financial institutions are insured and cautioned those trying to embezzle the cooperative’s funds, saying that they will face the law.
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