Locals in West Nile want SBRF, ACF funds channeled to SACCOs
By Andrew Cohen Amvesi
ARUA. The locals in the West Nile sub-region have urged the government through Bank of Uganda to consider channeling the Small Business Recovery Fund (SBRF) and the Agricultural Credit Facility (ACF) fund to their Savings and Credit Cooperative Organizations (SACCOs) for easy accessibility.
The appeal was made by the residents during a community dialogue (Baraza) organized by Bank of Uganda and Uganda Investment Authority (UIA) at Hotel Le Confidentiel in Arua on Thursday.
The government established ACF for farmers and Agro-processors in 2009 and SBRF as a Covid recovery measure for small businesses in July 2021.
According to Richard Byarugaba, the Director of Finance at the Bank of Uganda, over the last 14 years of administering ACF by Bank of Uganda, they have registered success by lending up to Shs840.96bn to over 3,744 beneficiaries to create jobs and markets for small holders.
He said, on the other hand, though the uptake of SBRF has been low, they have registered some improvement in the uptake this year with loans amounting to Shs16bn being disbursed to 365 small holders.
But during the Baraza, locals argued that they had failed to access the said government funds from commercial banks due to the tough conditions set by the banks.
Caesar Draecabo, a businessman in Arua city said there is a deliberate move by the commercial banks aimed at dodging the disbursement of the government money because the funds have similar products they are promoting.
“And because they are promoting their products which are related to Bank of Uganda, they are caged in saying that these conditions are tough. Most of the people here have attempted making applications but got their frustrations from these commercial banks. But we recommended that we have some strong performing SACCOs; Moyo SACCO is one of them, Adjumani, Koboko and a number of SACCOs,” Draecabo said.
“If the commercial banks can not disburse these government funds, let these monies move to these SACCOs and we are able to access the monies from these SACCOs because we own these SACCOs and we are members of these SACCOs,” Draecabo requested.
Draecabo was quickly supported by Philliam Aleti, a resident of Vurra sub-county in Arua district who said that the government should channel the funds to SACCOs and give the SACCO leaders power to disburse the money to their members since they know them very well in order to make accessibility and recovery of the funds very easy.
Similarly, Dr. Ronald Debo, the Uganda National Chamber of Commerce and Industry (UNCCI) Arua City branch chairperson noted that the traditional banks are promoting their routine loan schemes because the interest rates there are higher (18 to 20 percent) while the affirmative actions are only at 10 to 12 percent yet the conditions are all the same.
“So, for me the issue is policy. Government is pushing banks to give out loans and yet the conditions are still hard. So long as the policies are not adjusted, people will fail to access those funds, it will only be accessed by those who are well off, those who have land titles and those who have good cash flows. My recommendation is that the Bank of Uganda and Parliament should come up with new regulations and policies to make it simple for people to access these funds,” Debo suggested.
James Odur, the Stanbic Bank Arua branch manager apologized on behalf of all the commercial banks in West Nile, saying it is true they have not done enough in disbursing the government funds in the sub-region.
In his remarks, Byarugaba acknowledged that they have been getting feedback that the government money has been competing with the commercial banks’ products and that the managers are given bonuses on the bank products but not on the government funds.
“This is the sensitization we also have to bring to the banks. Otherwise, they must support the government and the communities where they are doing business. We succeeded in having the law amended that large SACCOs are licensed by the Bank of Uganda. So, when that process is done, automatically SACCOs will get the money but as we stand now, a SACCO can borrow the money under block allocation and give it to its members,” Byarugaba advised.
However, while presiding over the Baraza, Evely Anite, the State Minister of Investment and Privatization cautioned the people of West Nile against borrowing the money without proper planning.
“My people of West Nile, I want to make it very clear to you that don’t go to borrow this money because you have heard about it. Go to borrow the money when you know and you have assessed that you are in business and you have the capacity to pay because it doesn’t make sense for you to borrow and you use the money for marrying a second wife. It doesn’t make sense because, are you going to pay the money using the children that you have been producing?” Anite asked.
“I have known and I have heard that people like to rush to borrow and they go to the extent of mortgaging their own home where they are supposed to sleep. Now my people of West Nile, please don’t do that,” Anite appealed.
This time round, the Minister tasked the commercial banks in West Nile to up their game by giving out the government funds to the people, promising to come back in three-months’ time for a follow up on the matter.
Anite was also excited to learn that the government has established about 22 cassava processing factories which are now lying idle in different districts in West Nile. She promised to do what it takes to ensure that the factories become functional so as to help the people of West Nile get out of poverty.
Anite revealed that the government has released a USD50m grant which farmers can also apply for to increase production to feed such factories.