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  • Re: Bank gani inatoa mkopo wa mashariti nafuu?


    A SACCO is a co-operative financial institution owned and controlled by the members who use its services. SACCOs serve groups that share a common bond, such as where they work or the community they live. SACCOs provide a safe, convenient place for members to save money and to get loans and other financial services at reasonable rates.
    Members are the owners of the SACCO and during the Annual General Meetings; they elect amongst themselves the Board of Directors. The Board of Directors amongst themselves elect the Executive Committee and other committees.
    In a SACCO a member is both the user of services and part owner of the institution. Members buy shares up to a maximum of 20% of the total shareholding in the SACCO. The SACCO emphasizes on local mobilization of capital to ensure long term sustainability of the institution; hence capitalization of the institution has to be done by the members themselves.
    SACCOs offer its members a variety of savings products (i.e. demand deposits, fixed deposits, etc) on competitive terms as one way of integrating the informal sector in the main stream financial intermediation. Interest on the savings is exempted from withholding tax.
    As owners of the SACCO, members have easy access to loans for both productive and provident purposes. The terms of the loans are commensurate with the nature of their businesses and circumstances. To ensure sustainability of the loan fund and to protect it against erosion arising from inflation and loan losses, loans attract market interest rates.

    I hope this will enlighten you on what a SUCCOS is. However there are set backs too. Read the following.

    2005-11-04 07:43:58
    By Editor
    Tanzania has more than 1,870 savings and credit co-operative societies (SACCOS). This number makes only 0.7 per cent of the whole population of the country.

    Our Kenyan neighbours number some 32 million people and 7 per cent are members of SACCOS while far away, 80 per cent of Canadians are SACCOS members.

    It is clear, therefore, that the majority of Tanzanians do not know the benefit they can get from savings and credit co-operative societies.

    Canadians are richer than Tanzanians yet the majority are members of SACCOS.

    So, the problem in Tanzania is lack of knowledge of what SACCOS are and what the societies can do to make us less poor.

    Besides, our SACCOS, according to a survey are managed by individuals who do not have managerial and financial expertise.

    The Executive Secretary of the Savings and Credit Union League of Tanzania (SCULT), Abdul Shaweji said recently that the SACCOS also lacked co-operative officers, auditors, inspectors and consultants.

    We agree with Shaweji that there is a problem because if the co-operative societies do not have trained officials, the members would find themselves in a dilemma in case they encountered operational problems.

    Trained auditors make sure that accounts books are properly kept to avoid incurring inadvertent losses.

    It is also imperative that trained inspectors visit co-operative societies to rectify any possible shortcoming and encourage members where they are not succeeding in their operations.

    Consultants are also necessary especially when a group of people want to form a co-operative society, be it a consumer, producer or a savings and credit institution.

    Without doubt, women are the majority in any economic activity at the micro-level. They are the main producers of wealth.

    Therefore, they should be encouraged to become members of SACCOS wherever these financial institutions exist so that they are empowered to become better entrepreneurs.

    By last May SACCOS members’ investments totaled 13.2bn/- in form of shares and 28.6bn/- in form of savings and 2.9bn/- were deposits while loans issued to members amounted to 54.1bn/-.

    These amounts of money seem impressive on paper. However, they are not if compared with the population of Tanzania.

    What should be done here is to encourage more Tanzanians to become members of SACCOS.

    Shaweji said that although the banking sector was recently restructured, the financial system, which included the SACCOS, had not been touched.

    He said that the system suffered from weaknesses such as continued depending on foreign funding and no significant effort to make them self sufficient and sustainable.

    He also said that different laws make SACCOS difficult to develop common standards for monitoring, supervision and regulation.

    We also agree with him that regulations governing the operations of SACCOS should be simplified so that prospective members of the co-operative movement can easily understand them.

    For example, simple co-operative regulations, written in Kiswahili, can indeed become sufficient incentives to most Tanzanians, especially those living in rural areas.
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