Billions of francs were reported to have been embezzled in 238 Umurenge Savings and Credit Cooperatives (SACCOs) involving more than 500 suspects, before the government embarked on automation, Finance and Economic Planning Minister Yusuf Murangwa said. Up to Rwf10 billion managed by SACCOs had not been accounted for by 2019, the minister told the Parliament on Tuesday, July 8, as he gave a presentation on issues affecting the microfinance entities. There are 416 Umurenge SACCOs countrwide. Five SACCOs alone lost Rwf641.7 million with the involvement of their own managers and staff, the minister said. ALSO READ: Govt to compensate Rwandans who lost savings in Umurenge SACCOs SACCO Jabana in Gasabo District incurred a loss of Rwf439.2 million due to poor management by its staff. In 2015, SACCO Mugunga in Gakenke District was defrauded by its employees, who stole Rwf67 million. This money has not been recovered, he said. Isoko SACCO Gasabo located in Kimironko Sector lost Rwf87 million, stolen by its then manager, who later fled the country. In Rusizi District, Rwf23.7 million was stolen from the Butare SACCO, while Bweyeye SACCO was robbed of Rwf24.8 million on different occasions, and this money has not been recovered. ALSO READ: Parliament summons finance minister over SACCO woes The issues of theft and poor management in SACCOs were mainly observed during the period when Umurenge SACCOs were using ledger books and paper-based records, Murangwa said. “Due to poor operational practices, particularly the reliance on paper-based systems, weak internal auditing, and lack of integrity among some SACCO employees, since SACCOs began operating, around 238 of them have experienced cases of theft involving their staff, management, and, in some instances, the collaboration of their members,” he explained. ALSO READ: SACCOs to be merged into single Cooperative Bank by 2026 Among the 238 SACCOs, he said, 19 SACCOs failed to return savings to their members and funds intended for beneficiaries of the Vision 2020 Umurenge Programme (VUP) and health insurance contributions under the Community-Based Health Insurance scheme (known as Mutuelle de Santé), paid by members through RSSB accounts. “These SACCOs received financial support as approved by the Cabinet meeting of March 2021. Other SACCOs were granted loans to enable them to continue their daily operations. Some have fully repaid their loans, while others are still repaying them successfully and are currently operating without any management issues,” he said, citing Kimironko SACCO, which received a loan of Rwf280 million, while Jabana SACCO received Rwf217 million. Some of the suspected wrongdoers returned the embezzled money. “Both SACCOs have fully repaid the amounts they were loaned and are now operating normally and efficiently,” he said. 500 suspects and recovery progress Those involved in the embezzlement cases were prosecuted, and some repaid the stolen funds, while others were convicted by the courts, Minister Muranga noted. However, he said, many SACCOs have generally been unable to recover the stolen money, as the individuals involved often had no registered assets. In 2019, he said, a special task force was established to track down and recover the funds from individuals. ALSO READ: Taking stock of Umurenge savings and credit co-ops By that time, over Rwf10 billion had been lost, stolen, or misappropriated from Umurenge SACCOs. “In total, approximately Rwf2.2 billion has been recovered. Out of approximately 500 individuals suspected of involvement in the embezzlement, only 153 managed to fully repay the amounts they stole. The rest either made partial repayments or did not pay anything at all,” he said. Around 103 individuals fled justice, and their whereabouts remain unknown to this day. MP Beth Murora suggested that SACCOs should consider writing off defaults to clean their books and move forward. “There should be a structured way to write off unrecoverable loans to allow SACCOs to rebuild rather than being stuck with uncollectible loans,” she said. Minister Murangwa responded that loan write-offs must follow a formal process and that ongoing SACCOs’ consolidation efforts, leading toward the formation of a national Cooperative Bank, will resolve many of these legacy issues. “As SACCOs become more formalised and reach the operational standards of licensed banks, these problems will be gradually addressed through stricter regulations, including proper handling of loan write-offs,” he noted. To address the embezzlement and poor management issues, he said, the government is accelerating the implementation of a programme to digitise SACCO operations and strengthen their capacity to operate more professionally. Since June 2024, all 416 Umurenge SACCOs have been automated to use digital systems to deliver services. ALSO READ: What to expect from automation of Umurenge SACCOs “The introduction of technology has improved internal controls, enhanced risk management by enabling early detection of potential losses and made inspections and external audits by oversight bodies more efficient and regular. These reforms have significantly helped to prevent theft and mismanagement within SACCOs,” he said. The consolidation of Umurenge SACCOs has now reached the stage of merger at the district level. So far, seven SACCOs in Nyarugenge, Gasabo, Kicukiro, Gicumbi, Rubavu, Rwamagana, and Nyamagabe have already been digitised and merged at the district level. There are 23 district SACCOs yet to be merged at district level before forming the National Cooperative Bank. Once SACCOs in all 30 districts have been consolidated, a national Cooperative Bank will be established. Consolidation of SACCOs in all districts is expected to be completed within the 2025/26 fiscal year. District-level SACCOs will be integrated into the Rwanda Integrated Payments Processing System (RIPPS) platform to facilitate easier transactions. This means that SACCO members will eventually be able to withdraw their money from any location across the country.
