Money Loans and Satellite Dishes: A Short Introduction to SACCO

Other Stories from Kabasheshe: Hills of GreenGhost Water Taps | Fish and Chips

SACCO is the acronym for Savings And Credit Co-operative.

I had never heard of this acronym before coming to Uganda. While in Kabasheshe, on at least two occasions, I had seen signs with such a reference on them.

I had asked my family if there were any nearby and if they could take me. They told me of one in Rusoka, which a friend worked at. We planned to arrive there on Wednesday.

IMG_3663The walk through Rusoka was interesting. We passed a vocational training center and a primary school for orphans. There were some exposed water pipes next to a hand pump, indicating previous scavenging. Beside some business and across from a hair salon, we arrived at the Turibamwe SACCO in the center of town.

The building wouldn’t be that noticeable – one-story, concrete walls, with a small amount of white paint – if it wasn’t for the high level of security that comes with a high level of money changing hands. I walked under their slogan of “Save & Invest in the Future” to see the familiar sight of cashiers to the right and management to the left. There were four or five patrons sitting next to the SACCO’s armed security guard. They were busy but seemed to welcome the excuse to take a break and talk.

Judith, my host sister, spoke with Susan, one of the two cashiers behind the wooden and glass divider, and asked her if I could speak with someone to learn more about how this institution operates. We moved towards the back room.

Sitting there was Carol, an accountant and the person who was willing to answer my questions. After talking with her and feverishly writing down points into my iPhone, I learned nearly everything about this SACCO.

The SACCO began nearly a decade ago, back in 2006, and has already grown to have a second branch, opened 3 years ago. Unlike a typical bank, a SACCO consists of members who are, in effect, the owners. Rather than maximizing profits, it operates to serve the community. They are accommodating to a range of needs and often offer lower interest rates that normal moneylenders.

Although we have a similar financial structure in North America with credit unions, the thing that surprised me about this SACCO was that it was the only place where people could get credit. There were no banks in Rusoka or in Kabasheshe. Without a SACCO, people would be limited simply to what they could produce and sell, unable to ever lend money (at a reasonable rate) to improve their lives.

What services are provided by the SACCO?

At the most basic level, a person can deposit money into the SACCO without having to become a member; but this excludes them from accessing other services. The more common approach is to become an Individual Member. This requires depositing 26,000# (26,000 Uganda shillings, or about 10 US dollars). The money goes towards membership (10,000#), stationary to keep records (6,000#), and shares in the co-operative (10,000#). A group or pair can also open an account; this type is similar to the individual member with the membership fee costing an extra 10,000#.

For members with money to spare, the SACCO also offers a Fixed Account option. This allows a member to earn money by leaving money in the coffers. If a person can let some amount sit untouched they will get back 1% interest per month. Fixed accounts are as little as 2,000# or over a million shillings; it’s up to the member.

What can a loan be used for?

By having a membership with the SACCO, an individual, pairing, or group is now one step closer to acquiring a loan. I was quite astonished at the breadth of items that qualify for a loan. Taking a loan to buy farmland or to build a business make sense enough, but the co-operative also allows people to pay for their children’s school fee, make home improvements like solar power or piped water, and even for luxuries like satellite television. All of these come with a 3% monthly interest rate. The lower rate of 2% is for motorcycle loans, typically used for someone who will start a boda-boda moto taxi service. The loans are additionally unique in that a loan officer will be the one collecting the item, not the loan signer; cash is never exchanged. Whether your loan is for business or pleasure, the maturity will be between three and twelve months, depending on what the client wishes.

How much are the loans?

“It all depends on the number of shares”, Albert explained to me just after he entered the room. Albert is a loan officer and entered the room midway through my flurry of questions.

Shares are bought and sold by the members. To qualify for a loan, a member must have a minimum of 3,000# in shares. They must also have an active account, making deposits and withdrawals, and wait at least six months after opening their account. Once these requirements are met, a member can apply for a loan. The 10,000# in shares that each member receives initially are multiplied by a factor of eight, meaning that a loan of 80,000# is available. If a larger loan is needed, a member simply needs to buy more shares and will then be able to apply for a loan eight times in size.

Are there any risks?

This was the last question and one I thought was crucial to the co-operative’s success.

The SACCO has two methods to making sure re-payment of the loans is successful. The first, as Albert explained succinctly, is to have the member receiving the loan to put up collateral. This is normally some asset – land, livestock, or possession – of real value, usually near twice the value of the loan. But cows can move. This is problematic if a loan is based on a movable commodity as collateral. So, the SACCO has a second device. This is family.

In addition to the member signing the loan, a co-signer, usually a family member, with also attach their name. That way, if the original signer does anything shady, like sell some assets after receiving their new motorcycle or other item, the family will have to become involved. It means that the SACCO has more oversight and the most powerful kind in one’s own family.

I left by thanking everyone for their time and patience. They thanked me for coming by and let me know that I was always welcome to open an account, even in the future.

Susan walked me out to the front courtyard, reminding me that they are “open Monday through Friday, from 8:30 to 4:30” before saying goodbye.


Ghost Water Taps

Other Stories from Kabasheshe: Hills of Green | Fish and Chips | Money Loans and Satellite Dishes

“One tap…two taps…three taps.”

This is what I was hoping to count to myself on Monday when I walked through town. Unfortunately, my optimism would be squashed.

IMG_3651The day before, Mzee, my host grandfather, described the water project he hoped to start in Kabasheshe. Currently, the closest water source is located at the very bottom of the valley; at least 30 minutes there and back, up and down hills. My host sisters (and me on a few occasions) make the journey at least once a day, but more commonly multiple times. Older sisters would carry 20-litre jerry-cans on their head. When full with water, these would weigh 20 kilograms or 44 pounds! I barely managed when I tried. Younger children carry 10- and 5-liter jugs; one or two, depending on their strength. These feats of strength are more impressive when considering that a 2-year-old toddler may also be on a woman’s back.

I should also point out for clarity that my household is somewhat lucky in that it is located directly uphill from the community spring. Other families have the dual challenges of living uphill and down the road from the water source, increasing their walking time.

IMG_3677If you walk 30 minutes up the road, towards the main junction, you find a completely different reality. The village of Rusoka seems to be an oasis of water projects – piped water, community boreholes, and others. On our way to see their current gem, my hosts and I passed a centrally placed hand pump. I was told that it was spoiled, not in use. I trust that this is true as I saw nearby pipes ripped out from the ground. After months of no more flowing water, the plastic pumps are commonly extracted; these can then be used by families to illegally smuggle power into their homes or any other use that they can come up with.

The Rusoka Primary School has another interesting feature – a
play pump; age unknown. Play pumps are water projects that replace the typical manual hand pump with a circular merry-go-round, one intended for children to play on. These work when kids are nearby and willing to use it, but are problematic for a woman by herself. It is also a sad part of development that many communities are conditioned to attract international donors, so children may come out to play for photos, but will stop once the abazungus (foreigners) leave. It was interesting to see one, though. If I had more time, I might have tried to uncover its history and current level of use.

IMG_3708After walking through town, passing orphanages, training centers, and hair parlors, we arrived at the pump house. This relatively large building provides piped water to the entire Rusoka community. It pumps water uphill to a storage tank and then downhill to several taps. This is the model that my village hopes for. Built many years ago, it has run flawlessly.

A cynic might propose that Kabasheshe’s mostly Muslim population missed out on the charity that Rusoka received from Catholic organizations that visited it, being a majority Catholic population itself.

A realist might say that Kabasheshe’s location further down the dirt road has left it with worse luck. Rusoka is closer to the main road, which also acts as a pathway between Uganda and Rwanda.

Either way, my host village finds itself without easy access to water.

IMG_3386Eight or maybe nine years ago, they did get a borehole, supplied by the local sub-county government. But, after 3 years of use, it broke down and was never fixed. It sits there today, a skeleton of its former self, with all removable components scavenged and probably sold.

This is the start of Mzee’s plan. Three years ago, Rusoka received electricity and thanks to a politician who lived here, the line was extended to Kabasheshe. Him, his brother, my host family, and a few others now have power.

Power is quite a life changer. It means that you can own a cellphone, as it needs to be charged regularly, and connect with others far away. It means a steady, cheap source of light. And it mean that you can own a TV and relax while watching it, as my host family regularly does.

But it also means one more thing, more options for community projects. Rather than the manual water pump that failed in Kabasheshe before, Mzee wants to install a motorized pump to provide piped water to his community. Just like Rusoka.

Going uphill, the water would be pumped to storage tanks, either polyurethane or concrete, and then downhill to various sources. Using storage tanks mean that water can still flow, even when there’s a power outage. Also, meters can be placed on the multiple tanks to track usage.

After seeing the borehole and location for future tanks, I was taken to see the community taps. There were three of them. Or, at least, that was what I was told.

One at the primary school. One at the trading center (local store and outdoor pool hall). And one near a home on the main road.

IMG_3571First, the school. Like what I saw in Rusoka, a plastic pipe was sticking out of the ground. After the borehole stopping providing water, someone dug up the line, cut it, and took it home. But, there was hope that a new line could be installed. It would be nice to see this school receive running water, as the alternative is children missing school to fetch water.

Next, the family home. We arrived at our destination, but I saw no tap. There was a hedge dividing two properties. A gated house on the left and a small business on the right. It turns out that this tap was demolished after the borehole broke and was in the way of the homeowner’s plan. All that is left is a memory of what was.

The third and final tap, at the trading center, had the same fate. It was demolished some time ago. Nothing left to signify that it was ever here.

This left me puzzled. Mzee told me about the three taps and my mind raced with possibility. But to have so much infrastructure missing, it would be a daunting project.

So, what can be done?

It is definitely possible to provide piped water to the community. The borehole is there. At least one tap (probably the most important one, in my view) is still in the ground and ready to be connected. And the community wants it.

How to do it?

As with most things, money is primary. Funding can come from one of three sources. It can be through the community, everyone pitching in and taking full ownership. The government could come in, but people have little to no trust in them. Or an outside source, like an international charity or aid organization, could be the one to manage the project.

In any case, some things would need to be bought and installed. A motorized pump at the borehole, connected to the power line. A house would need to be built to contain everything. A 200-meter trench would need to be dug, at least 5-feet deep to prevent the thievery of the past, and plastic piping laid. The hilltop would be leveled and a few tanks installed on concrete or other structure. More trenches and piping would go downhill. The school would be re-connected and new taps would need to be constructed elsewhere

All in all, this would be a massive project. Probably the biggest one Kabasheshe has every received. I want to make it happen but have my reservations.

Will the village be able to repair future breakdowns? Will they be able to prevent thievery? Is it better to wait and lobby the government to change its ways?

What do you think? Is there anything not considered or missing?


Hills of Green

Other Stories from Kabasheshe: Ghost Water Taps | Fish and Chips | Money Loans and Satellite Dishes

Yellow jerry-cans scattered on the ground. IMG_4047Two young girls cleaning the last of the pots and dishes. Coffee and cassava drying on half-cut sacks near the rabbit house. Grandmother playing ludo on her mat in the center of the yard. Five of her adult grandchildren playing cards under the shade tree. Cock walking, calling. A toddler, with trousers kicked off, running after his inflatable football. Hills of green everywhere you look.

This was midday in Kabasheshe – a rural village in Ntungamo region, western Uganda. I came here for the week to learn about small-scale agriculture and the lives of people who farm for their food and income.

An ambulance brought me here six days prior. It wasn’t for an emergency; the ambulance doubles as a van when the real ones are used by KIHEFO staff. Atayo was driving. Trina and Emily were passengers with me. Along the way, we picked up roadside pineapple, three for 1000 shillings each, to add to my care package of supplies. Kabasheshe is just an hour’s drive from Kabale.

I should mention that the family I would be living with is that of Atayo, my flatmate in Kabale, and Dr. Geoffrey Anguyo, the founder and director of KIHEFO. The grandmother I mentioned above is Dr. Geoffrey’s mother; grandmother in their language of Lougbara is dede. Also in the mix is his father, who goes by the traditional title of musay, or “old man”. The grandchildren – Atoyo’s siblings and cousins – are Judith, Rubina, Monica, Joanne, Milton, Halima, and Sanity. Lincon is Judith’s two-year-old son and has a penchant for acting like he’s twenty, like carrying farm tools twice his size.

After a warm welcome and a side of tea from my host family, we toured the farm. We started near the home and worked outwards. Through a wall of elephant grass, we walked to inspect the coffee field – two and a quarter acres, with a quarter more being prepared for planting, of Robusta and Arabica coffee trees. The harvest was nearing its end with few berries for the picking. Coffee “beans” (actually seeds) exist inside the berries grown on the stems of these trees.

Arabica beans bring more money at the market, but produce less often and the trees have shorter lives. This is why the family’s coffee field is mostly Robusta, with some Arabica trees mixed in between. There are also some young cassava plants, acting as a nursery.

My new family, originally from the northern Arua district, eats a staple diet of cassava, so it is no wonder that three of their nearby paddocks (strips of land with an area of around 1.5 to 2 acres each) have this resilient crop. I learned that cassava – a root vegetable – is grown from stem harvesting, rather than seeds. Basically, after pulling out the tree and harvesting the cassava from underground, a piece of healthy stem, about a hand’s length, is cut and planted. The family has staged their paddocks so that cassava can be harvested daily and the supply will be continuous.

Additionally, two paddocks are waiting for maize. Two more paddocks will create an apiary (bee farm) to manufacture honey.

If you take a walk down the hill, passing between the primary school and mosque, onto the football pitch, and along the valley stream, you will find the continuation of the family farm – three more paddocks. One paddock is growing tomatoes, planting just a week ago. Another one will be for chilies. And the final one has cabbages growing near the stream.

At around 20 acres, this farm would be considered quite large compared to other home gardens and small-scale farmers. Although, it a farmer from the Global North might not think so.

Back at home, the family has two areas set aside for grazing goats. And one of their buildings is home to a rabbit breeding center. (See my previous post “What Can a Rabbit Do?” to learn more about the power of rabbits in Uganda.)

But wait! There’s even more.

Around the house there’s an assortment of fruit trees: passion fruit, banana, paupau, lemon, and avocado. All in all, this farm, like many of the neighboring ones, hosts a diverse ecology that allows for the family to not only feed itself throughout the year, but also makes a living.

The first few days, before I would be on my own, also had some interesting ‘firsts’. For dinner on Friday, I had the honor of slaughtering the chicken that would be our dinner. Judith, the eldest of the grandchildren, showed us how she made donuts, or mandas. I had brought a Frisbee as a gift for the children, so we tried it out down at the football pitch. Dancing, music and foot races also helped to pass the time.

All of the family spoke good English, as it was a requirement in school, in addition to their local Lougbara (Arua district), and the southwestern languages of Rukiga (Kigezi district) and Nancoli (Ntungamo district and similar to Rukiga). Grandmother spoke only a few words of English, so I needed to learn Arua to reduce the awkwardness of my presence.

I used a bit of Lougbara to help talk with dede and the young ones:

“Min goni”  “How are you?”

“Elon goni”  “How did you sleep?”

“Mamokay”  “Fine”

“Mokay”  “Well”

“A wadi fo”  “Thank you”

“Kaka”  “Wow!”

I also practiced my Rukiga greetings with the townspeople:

“Agadi”  “How are you?”

“Nigay”  “Fine”

“Way ba lay”  “Thank you”

Apart from daily activities, including investigating the local water spot, nearby fish farm, and bank cooperative in the next town (I’ll document these in more detail in future posts), I tried my best to learn about rural livelihoods by shadowing the family members.

As the coffee harvest was coming to a close and the animals were being tended by Milton, my first mornings involved going to the tomato paddock. Small tomato trees were planted a week before and the field needed a final weeding. Unfortunately, I arrive not knowing that the tomato plants were in the ground, making for an awkward start. I was told to mimic the others, by making chopping motions with my four-foot hand hoe, pulling dirt and weeds downhill. The tomato plants are only an inch or two tall and unfortunately, look like everything else. After being told to avoid the plants and seeing the rows made the process much less nerve-wracking.

Up and down the valleys you find people working the fields. Men are digging. Women are digging. Children pretend to dig.

By not using tractors or other farm equipment, the work has to be done by hand. Weeding, planting, harvesting. All of these parts are done by hand or with the aid of a hand hoe. It means that farmers can have 2, 3, 4, or more varieties of crops, all within sight of one another, all working together. Trees don’t need to be removed. Hills can be maximized. A local, natural way of farming.

Although the family did other chores back at home – drying coffee, grinding cassava, collecting milk down the road – most of our time was free to interact. There were cards games. They taught me Master. I taught them Hearts and Speed. I showed the kids how to make paper airplanes and what tic-tac-toe is. We shared stories, listened to music, and danced from time to time. The biggest surprise for me was how much time was spent watching television. The area received electricity a few years before and it has allowed for a major improvement to the family. Not only hearing world news, but having lighting and power to charge things like phones.

Overall, the week showed me how similar a farming life in Uganda is to one in Canada. The crops may be different and there is an obvious disparity in machinery and chemicals used, but at the end of the day, after all the hard work is done, people enjoy their spare time by relaxing, watching something on the TV and playing card games together.

We’re not so different.

Photos from the week:

This slideshow requires JavaScript.