The Minister for Trade, Industry and East African Community Affairs has announced that the country could finally get the long-awaited national cooperative bank later this year.
It is a welcome development considering the idea had long been floated but with little, if any, action on the ground.
The process leading up to the establishment of the envisaged bank is broken down into three phases, namely; creating an automation software that links all the existing 416 Umurenge savings and credit cooperatives (Umurenge-Saccos); setting up and looping in the district- Saccos (30 entities) to allow for proper coordination in each district; and, finally, creating the cooperative bank.
The proposed coop bank will oversee the operations of all the Saccos countrywide, allowing for proper coordination of Saccos and thereby promoting efficiency and internal controls.
Presently, each Sacco is managed separately and this presents recurrent challenges, especially to those in charge of monitoring their operations, such as Rwanda Cooperatives Agency.
While Saccos have boosted national efforts geared towards promoting financial inclusion, the lack of proper coordination and strict enforcement of prudential banking practices have often resulted into mismanagement and sometimes outright embezzlement, hurting the same objectives for which Saccos were set up in the first place.
Therefore, the setting up of a national cooperative bank will help streamline Saccos banking practices and, as a result, restore and consolidate members’ and public confidence in these crucial financial entities.
It is our hope that the institutions charged with overseeing this process will stick to the laid down plan and project timeline to ensure that the envisaged regulatory body does not only come into place but goes on to deliver on its critical mission.
This would boost the country’s efforts to deepen financial inclusion, and promote savings and credit access, especially in the countryside, as well as help lay a strong foundation for a cashless economy.