why are cooperatives having it difficult to sustain themselves

Among all the East African countries, Uganda is the one behind in the business of cooperatives. There are a number of reasons for this including turmoil in the country, government policy especially after 1986, bad governance on the part of cooperative leaders and managers made worse by a non existent technical supervision; and last but not the least market forces.

During the time I worked with the Uganda Cooperative Savings and Credit Union, I realized that SACCOs/Credit Unions had a big potential to provide financial services to the masses of the poor in this country if the issue of governance would be correctly addressed. Such address would have to look at cooperative legislation and develop appropriate legislation for SACCOs. That was 1997 and the first step I took was to ask the World Council of Credit Unions (WOCCU) to identify a consultant to work with the UCSCU Board and management as well as SACCO leaders to draft such legislation.

WOCCU identified and supported Mr. Cris Kerecman to come to Uganda for almost a month in Novemeber 1998 to work on a draft document that would meet the challenges of the SACCO system in Uganda.

As fate would have it however, these efforts would not be taken seriously and for different reasons depending on who you talked to. In 1999 I left UCSCU due to intrigue and as such interest on the subject matter seems to have waned off until 2003 when government came up with a policy to promote SACCOs as a way to deliver financial services to the least banked part of the population. This policy was, however, constrained by the fact that the then legislation governing all cooperatives in the country was too weak to support this government policy. There was need for legislation that would adequately protect members funds in the SACCO. A draft document to support this policy was therefore crafted and may have been sent to parliament or is still with cabinet and in the process of one day becoming the SACCO Act of Uganda.

I have looked and reviewed the said draft law and I want to share the implications of the same on the governance of SACCOs once it becomes law. This analysis is particularly intended for SACCO leaders and managers in the country and for any one interested in promotion of SACCOs in the country but has no SACCO background.