A cooperative bank to manage all the country’s Savings and Credit Cooperatives in sectors, commonly known as Umurenge Saccos, will be in service before the end of the year, the Minister for Trade, Industry and EAC Affairs has said.
Speaking to The New Times, last week, François Kanimba said ongoing works to put operations of Umurenge Saccos online will be completed in mid-year, paving the way for the cooperative bank to be established because it requires all the Saccos to be connected first.
Once operations of SACCOs are automated, the minister said, they will be first linked at the district level and then the Saccos making up a cooperative bank at the district level will be inter-connected at the national level to form a cooperative bank that will bring together all the country’s 416 Umurenge Saccos.
“By the end of 2017, the establishment of the cooperative bank will have been achieved, that’s the agenda we are working on,” Kanimba said.
The Government moved to establish a cooperative bank as a central financial institution for the country’s sector-based Saccos to ease their management and improve services to clients.
When the cooperative bank will be up and running, clients of Umurenge Saccos will be able to withdraw money from any of the coop’s branches in the country.
It will also be easy for the central bank and the Rwanda Co-operative Agency to supervise Saccos unlike the current situation where the agencies can only assess the coops one at a time.
The Cooperative Inspection Division Manager at the Rwanda Co-operative Agency, Gilbert Habyarimana, told The New Times that the automation of Saccos and grouping them under one institution will bring the kind of modernisation that is needed to improve their services.
“It was a problem for the general population who need to use the Saccos in different ways and it was also a challenge for us to inspect different things like fraud and other exchanges. Basically, Saccos need to work like any other bank,” he said.
As part of automation process, Habyarimana said, at least 16 Umurenge Saccos across the country will go online by the end of the month in a pilot phase, paving the way for the rollout of the programme across all the saving coops.
But setting up a cooperative bank for Saccos will also require changing the law governing cooperatives in the country partly to enable the Saccos get shares in the bank without necessarily depositing the same amount of money.
The current law on cooperatives grants cooperative members an equal share in terms of monetary contributions and the same voting powers on the coop’s matters.
Kanimba said because the sector-based Saccos were formed on terms that are specific to the sectors, the law governing cooperatives will be amended to enable the Saccos have the same voting powers in the cooperative bank even if their monetary shares in the bank may be different.