KAMPALA – Archdiocese of Mbarara Development Association (AMDA) SACCO, an umbrella association uniting all Catholics that hail from Mbarara Archdiocese living in Kampala on September 30 commemorated its 10th anniversary with a great vision of bank transition in the future.
The AMDA SACCO, a subsidiary of the bigger AMDA was established on May 5th, 2012, initially as “biika oguze” before being registered as a financial cooperative under the Cooperative Societies Act 1991.
Mr. Chris Gumisiriza, Chairman, AMDA told us that the Association was formed on seven pillars – one of them being economic empowerment. He noted that the Sacco which started with a few members has now crossed 700 members with over shs3 billion on top of having its own home.
As part of the celebration, he told the press that they launched many products including the digital platform intended to ease members’ transactions and other products to address members’ needs.
“Also, recently we launched a five-year strategic plan that will take us up to 2027. In this, we are looking to increase membership from 700 to all members of AMDA (about 6000), cross over the shs10 billion mark and eventually as we celebrate Silver Jubilee, we should have transformed into a bank.”
He is optimistic this will come true considering their current stability, good systems, and membership that not only gives them money but also borrows and pays back.
Much as shs150 billion as a requirement to transition into a bank seems high, Mr. Gumisiriza isn’t worried because “we have an able membership but also there are many opportunities that you can tap into where we can grow money to the required standards.”
He tipped other SACCOs at the infancy stage to know themselves as members and have something in common other than the money for growth and consistency.
Mr Stephen Magara – AMDA SACCO Chairman noted that when they came into office a year ago, they found their predecessors had started on a number of things – one of them setting a strategic plan and they have materialized it.
He noted that over time, the SACCO has enabled members to save and avoid exorbitant interest rates charged by external credit institutions like commercial banks.
“Consequently, over-dependence on larger institutions has been reduced, and bureaucratic processes have been minimized.”
However, becoming a bank, Mr Magara – an economist with a rich Bank of Uganda background says has a lot of regulations which also come at a cost.
“This is a mode we shall enter that dream. Before you become a bank, you are better off becoming a Micro Finance first – then to a bank but there is also another mode – accumulate enough capital, enough assets, go and acquire a bank. You are a SACCO, your operations are regulated under a Tier 4 but you own a certain bank as major shareholders. To me, it is the best,” he noted.
He, however, decried loan defaulting. “We have a circulated market and you find you have multiple borrowings from members, which increases the default rate.” He also decried low subscriptions compared to the total number of AMDA members.
Nonetheless, Mr Magara noted that for the past decade, SACCO has maintained a strong and profitable standing despite economic challenges such as inflation and bond price increases.
Mzee Silver Kangaho – First AMDA SACCO Board Chairman narrated that they started a very small number around 30 people which is the minimum number required for registration.
“We worked for two years under temporary registration. After two years, we had done well, so we were given permanent registration. The membership was still small, and systems were not yet in place. We were mainly relying on the honesty of the members and the voluntary spirit of the board members.”
“Of course, with time emerged people who are not Catholic at heart, they took money and didn’t pay,” he added.
Mr Kangaho said he was excited about their fruits because “usually SACCOs don’t exceed five years. Out of 100 SACCOs, 15 survive and the rest die in five years.”
He tipped the members to “know that this is ours, let’s all be aware of wolves in sheep skin – people who pretend to be Catholics but come to take what is not theirs. If we guard against that one, for sure we shall continue to grow.”
Mr. Chrispas Rwehaho from Kitabi Parish, a top distributor for Airtel Uganda, taking over areas from Kyengera up to Maya but also a car dealer says has been in SACCO for a span of five years.
He notes that he started borrowing from sh10 million and was later graduated to shs50 million, shs80 million, and today shs100 – the maximum of the allowed borrowed funds.
“The first time I borrowed, I was lacking float in my distribution and it really helped me so much. Recently, it helped me to establish a new business – Crespo Motors where we have more than 100 fleets of cars for sale. I want really to attribute the start and the success of Crespo Motors to AMDA Sacco.”
Ms. Phiona Tumubwine – a businesswoman dealing in motor vehicle spare parts in Kiseka market says she joined the SACCO about 6 years ago because she needed a belonging since she had no business by then.
“However, as a former banker, I also knew that once I start saving with the Sacco, unlike the banks, they do give dividends at the end of the year.”
“I started my business in 2018. Of course I was new, trying to learn a few things here and there, which goods people need and all that. A year later, I needed to takeoff seriously, so, I needed a junk of money. I told my husband and we went to AMDA Sacco and they gave me shs50 million. I stocked goods for December and that was my breakthrough. I managed to make enough profits, re-shopped and although Covid was entering, I had stocked enough and I was able to sell slowly by slowly.”
Mr. Casbart Tukundane, director at Delcom Construction Limited has also been in SACCO for five years.
“I have so far borrowed from the Sacco shs100 million five times which has really helped my business to realize a big change.”
“I have personally dealt with all the lending institutions but to get shs100 million from a bank, it will take you a minimum of two weeks, and for business, that’s a minus but with AMDA, 2-3 days, you have the money. So, AMDA Sacco works – especially for upcoming businesses,” he added.
Mr. Tumusiime John Bosco, Head of Procurement and Disposal Unit, Office of the Auditor General has been in the SACCO for about nine years.
He notes that at the start, there were some negativities about SACCOs but it did not stop him from joining because “I had trust in AMDA, looking at the credibility of the Association.”
Around 2019, he says he wanted a project that was capital intensive and “I first ran to my bank which I had saved with for more than 10 years by that time, requesting a loan of about shs100 million and to my dismay, they said they cannot give me up to that tune.”
“I called AMDA SACCO Manager, he told me the requirements. I proceeded and they gave it to me within a week – it was like a dream. Since then, it made my life easier because I was able to take off my project which is doing very well. When I completed repayment, I went back and they gave me another shs100 million and I want to attribute 90% success of my project to the SACCO. As a matter of fact, I now have big trust in SACCO than in banks.”