Rwandans urged to join cooperative societies

Rwandans have been encouraged to join cooperative societies because they are effective tools of poverty alleviation and are known to boost economic growth. The call was made yesterday during a live talk show held at Telecom House which was aimed at sensitizing people on the importance of cooperatives while seeking ways of how cooperatives can be empowered to promote development. The talk show organized by Rwanda Office of Information (ORINFOR) in conjunction with different government institutions and the Private Sector was aimed at providing a platform for leaders and heads of institutions to share ideas and views of the general public. It was revealed that Government has temporarily suspended legalization of different associations and organisations which operate under the pretext of being non-profit making bodies but end up accepting deposits from members. The new law enacted in 2008 states that such associations will now have to be fully registered as cooperatives with their activities and operations fully stated in their licenses of operations. Several queries were raised from the public concerning the issue of mushrooming associations and groupings in the country which start as simple associations but end up duping members under the pretext of helping them access credit. Damien Mugabo, the Director General of Rwanda Cooperatives Agency (RCA) said that the reason the government has quickly moved in to replace these associations with cooperatives which will be fully regulated to avoid such incidences. He added that currently there are many cases being studied across the country where different associations acting as SACCOS or COOPEC as they are commonly known, which have swindled people’s money through unauthorised Microfinance activities and in some cases, the government has come in to compensate the helpless people who lose money in such scams. Following the closure of several Microfinance institutions in 2007, the government, through the Central Bank disbursed funds that totalled to hundreds of millions to compensate the people who had deposited their money with these institutions. Speaking to The New Times after the talk show, Mugabo said that the RCA which was formed at the end of 2008 will be the new government body to oversee the operations of cooperatives as soon they are registered to ensure that ordinary citizens don’t lose their savings in financial scams as it has been witnessed. “The Rwanda Cooperatives Agency is an autonomous regulatory body charged with the task of promoting, registering, monitoring and supervising cooperatives in the country in order to make them more effective since they are major players in the development process” said Mugabo. A countrywide re-registration of cooperatives established before the enactment of the 2008 Cooperatives Law and new ones is expected to kick off in April this year. He added that under this law are stern measures to collectively punish cooperative leaders accused of mismanaging members’ finances. Some of the measures include imprisonment and refunding the swindled on top of an extra fine of Rwf 500.000. Ends

National

Rwandans urged to join cooperative societies