By Eumu Emmanuel
Kaberamaido, Uganda— On November 14, 2024, Mr. Arikos Peter, the Assistant Resident District Commissioner (ARDC) of Kaberamaido District, issued a stern letter of caution to the chairpersons of the district’s Emyooga SACCOs, addressing serious concerns over rental expenses and poor financial management practices.
In his letter, Mr. Arikos warned that the practice of renting office premises was detrimental to the growth and sustainability of Savings and Credit Cooperative Organizations (SACCOs), urging the leaders to prioritize purchasing property. He pointed out that rental expenses drain valuable resources, which could otherwise be invested in the SACCOs’ development. Additionally, he highlighted the financial risks associated with renting premises, which could destabilize the financial health of the organizations.
“Renting premises is unacceptable and goes against the core principles of good SACCO governance. It is vital that SACCOs take ownership of their premises to ensure long-term sustainability and avoid further financial strain,” Mr. Arikos wrote.
The ARDC also outlined several other governance challenges faced by SACCO chairpersons in the district. These included a lack of transparency and accountability, with some SACCOs failing to provide regular financial reports to their members. Mr. Arikos also criticized the poor loan management practices, particularly the accumulation of delinquent loans, which puts SACCOs at considerable financial risk. Furthermore, he expressed concern about instances of mismanagement, attributing it to negligence in following established policies and procedures.
To address these issues, the ARDC made several recommendations:
1. Regular Audits: Conducting regular financial audits to ensure transparency and proper resource management.
2. Effective Loan Recovery: Implementing robust systems to recover delinquent loans and prevent financial losses.
3. Adherence to Governance Principles: Strict adherence to SACCO governance principles, including transparency and accountability.
Mr. Arikos emphasized the urgency of taking corrective action. “Immediate steps must be taken to address these issues. Failure to comply with these recommendations will result in further action,” he warned.
Kaberamaido District is home to 33 SACCOs, with 18 located in Kaberamaido County and 15 in Ochero County. These SACCOs play a critical role in supporting local communities by providing financial services, especially in rural areas.
The letter has been seen as a wake-up call for SACCO chairpersons to adopt better management practices and ensure the financial stability of their organizations. The ARDC’s warning signals the district administration’s commitment to improving SACCO operations and ensuring that they are run efficiently and in line with national governance standards.
The letter, which was signed by Mr. Peter Arikos, has sparked discussions among SACCO leaders, with many acknowledging the need for better financial discipline but expressing concerns about the challenges of owning property and managing loan recovery effectively.
As the SACCOs work to implement the recommendations, the district’s administration is expected to monitor progress closely and take further actions if necessary to ensure compliance and improve the overall effectiveness of these cooperative organizations.