With savings worth Shs 7 billion, the police’s savings and credit cooperative scheme, (Exodus Sacco), is only second to the army’s in size, in the entire country.
And now the force wants to make a considerable return on a considerable investment by loaning money to other organizations too.
“Most of our officers have already got loans and we can’t offer them other loans before clearing the old ones. So, we have a lot of money dormant on the account. We have lent it to the banks and we are now looking at lending other organizations to boost their Saccos too,” Exodus Chairman Laban Muhabwe said in an interview on April 4.
“We shall have contracts with big organizations and give them loans at low interest rates to lend to their workers in their Saccos too. This will be another source of income for our Sacco,” he added.
Muhabwe told The Observer that the police Sacco’s savings are worth Shs 7bn in both cash and assets and by end of the year; they will have hit the Shs 10bn mark. Recently, President Yoweri Museveni capitalised it with Shs 200m. The Sacco lends out money at a 15-percent interest rate per annum, well below commercial bank rates that range between 22 and 25 per cent.
“These banks tell people that they decreased the lending rates to 19 per cent, but in their memorandum of understanding which people sign, they add on other fees like insurance, loan processing, application fee, stamp duty and stationery which total up to over 20 per cent,” he said.
The four-year-old police Sacco has a membership of 21,000 officers. It also bought a double-storeyed house at Old Kampala worth Shs 600m. The house, on Plot 217, Block 2, Sir Apollo Kaggwa road, will be rented out.
“We bought this house as another source of income for our Sacco on top of the capital shares and interest on loans. The Sacco is trying to get its own sources of income to explore new products like land, building and agriculture,” Muhabwe said.
He said the house would be rented out for between $2,500 (Shs 6.25m) and $5,000 (Shs 12.5m). He said they were also planning to buy big hectares of land and split them into plots to mortgage to police personnel who earn little salaries.
“We shall mortgage the plots and build houses for officers to pay in 10 years. This will save members from getting loans from the banks which have high interest rates yet they also have the pressure of school fees and food at home,” he said.
Police chief Kale Kayihura recently urged all policemen to join the police Sacco, describing Saccos as the engines of personal growth.