Experts advise saccos to resist temptation of becoming banks
- Written by John Musinguzi
Col Joseph Freddy Onata, the CEO of Wazalendo Sacco, has advised saccos to resist the temptation of becoming commercial banks.
“Not only are the foundations and mission goals of saccos and banks different, but it is saccos that can bring about mass financial empowerment and transformation. Whereas banks make profits for their shareholders and they serve customers, saccos serve their members and make profits for their members,” he said.
Onata was the keynote speaker at the official opening of the Ntinda, Kampala branch of Millennium Sacco 2012, on May 12, 2023. He added that Sacco leaders are elected from members whereas bank leaders are appointed from outside. Above all, the majority of banks are foreign-owned, and they repatriate their profits rather than invest in our economy.
While announcing that Wazalendo Sacco will go public next year, he shared that the idea of a bank had been suggested to them but they rejected it.
“So long as you ensure that your sacco is member-centred in all its activities, this will build a greater brand for you than being a commercial bank.”
With headquarters in Mbarara city, Millennium Sacco 2012’s Ntinda, Kampala branch is its eighth. Ronald Abaho, the general manager of Millennium, said the Ntinda branch is being treated as a pilot for Kampala, to guide them in opening three more branches in the capital city. It started operations mid-March 2023.
In less than two months, the branch has registered 85 new accounts, Shs 90.3 million in new savings and Shs 45 million in fixed deposits, and given out loans worth Shs 430 million.
Millennium Sacco 2012 is a brainchild of Ankole diocese bishop Rt Rev Dr Fred Sheldon Mwesigwa. It started in December 2012 on a small scale as a sacco for the diocesan staff only; its initial official name was Ankole Diocese Millennium Sacco. The bishop was the chief host at the Ntinda function.
Eng. Fred Tumwine, the chairman, explained that it was later decided that the membership include even non-staff of the diocese, and the name was shortened. He said anyone from any religious denomination can join the sacco because its goal is to spread financial empowerment and inclusion, and uplift communities.
Tumwine reported that the sacco so far has an asset base above Shs 21 billion, more than 21,000 members and a staff of 70 people. He reported consistent profitability despite the Covid-19 disruptions. In 2022 alone, the sacco made a net profit of Shs 1.4 billion. It paid Shs 340 million as taxes to Uganda Revenue Authority.
INVITATIONS TO OTHER DISTRICTS
Tumwine said that because of exemplary management and performance, Millennium has even been invited to open branches in other districts such as Katakwi and Kabale, among others.
Pamela Komugisha, representing Trade, Industry and Cooperatives, minister Francis Mwebesa disclosed that the ministry was taking a paper to cabinet soon to cause the revival of the Cooperative bank. She said such a bank would not repatriate the profits of its member saccos since it would be purely Ugandan-owned.