MSC embarks on recovering emyooga funds in Kitgum district

Kitgum | The Microfinance Support Centre Limited (MSC), the body contracted to implement component two of the Presidential Initiative on Wealth and Job Creation (Emyooga), has begun to recover over shs1.5 billion disbursed by the government to the Kitgum district.

In December 2020, the government allocated shs1.68 billion to the Kitgum district for distribution to Savings and Credit Cooperative (SACCO) groups that met the initiative’s criteria.

This funding was part of the government’s ongoing strategy to transition 68% of Ugandan households from subsistence to market-oriented production, which President Yoweri Museveni launched in August 2019.

54 SACCO groups were formed in Kitgum’s three constituencies: Chua East, Chua West, and Kitgum Municipality, with each receiving shs560 million. However, nearly five years later, much of the fund is still unrecovered, prompting the MSC to take action.

Nabadda Mable, MSC’s local manager, stated that all districts, including Kitgum, had received seed capital, with additional funds scheduled to be deposited in SACCO accounts.

However, SACCO leaders are required to submit necessary documentation to the Resident District Commissioner (RDC) for approval before receiving more funds.

“We encourage SACCO members to prepare their files, including an audit report showing their financial performance over previous periods,” said Nabadda.

She also noted that many Emyooga SACCO certificates had expired. MSC is now working with SACCO leaders to renew these certificates, extend their probation, or secure permanent registration from the Ministry of Trade for those performing well.

At least eight SACCOs in Kitgum have submitted their files for additional funding of shs20 million each. However, 46 SACCOs have yet to do so, potentially denying intended beneficiaries access to the program, as designed by the president.

In Kitgum Municipality, some SACCOs have begun repaying the initial shs30 million disbursed, while others have defaulted. Nabadda warned that defaulters would not benefit from the second phase of the Emyooga fund.

“We cannot give money to those who are unserious. They need to repay their loans to qualify for another round or allow others to benefit,” she emphasized.

Onenchan Bonny, Chairperson of Kitgum Municipality Veterans SACCO, highlighted a lack of understanding of the Emyooga initiative among many beneficiaries. He stressed the need for further sensitization before funds are disbursed.

However, he noted that some groups, such as Kacel Watwero in Pager Division and Pandwong X Service, were using the funds effectively by requiring members to provide a third of the loan amount as collateral and repay it within four months at an interest rate of 2-5%.

Alex Opira, the District Principal Commercial Officer, reported that at least eight SACCO groups had met all the necessary requirements under Emyooga guidelines. These groups successfully saved a third of the amount required to qualify for bank loans under the second phase of the fund.

However, over 40 SACCOs in the district have yet to save a significant amount, preventing them from meeting the initiative’s requirements.

Under Emyooga guidelines, SACCO groups must save at least 30% of the amount they intend to borrow from their SACCO account.

Kitgum Deputy Resident District Commissioner Haji Walire Marijian, acknowledged that bureaucratic hurdles had slowed fund disbursement to beneficiaries.

Nonetheless, he praised the Kitgum Municipality Veterans SACCO for being the first in the district to qualify for the second phase of funding.

About the Emyooga Initiative

Launched in August 2019, Emyooga aims to support selected groups across the country to improve household incomes, enhance entrepreneurial capacity, and increase access to specialized financial services.

The initiative focuses on 18 specialized categories of the informal sector, including Boda Boda operators, taxi drivers, teachers, journalists, market vendors, welders, restaurant owners, people with disabilities, salon operators, performing artists, veterans, fishermen, tailors, youth leaders, and elected leaders.

By Vincent Kaguta.