05 SACCOs and MFIs Mateete SACCO head office, Mateete Town Coucil, Sembabule District.
5.1 Mateete - an Agricultural SACCO Achieving Solid Performance1 Section 1: What is Mateete Market demand SACCO? The SACCO currently has 5,202 group, individual 2 ateete Microfinance Cooperative and institutional members . According to the Trust Ltd (MAMCOT) was General Manager of Mateete SACCO, Mr. registered on 29th October 2002 Busuulwa Lawrence, membership growth is under the Cooperative Societies projected at 9000 members by December 2015. MStatute (1991) and started operations in January This is based on the fact that the operational area 128 2003. The institution is located in Mateete Trading of the SACCO is expanding to the neighbouring Center, Sembabule district, with branches in districts of Masaka and Bukomansimbi served by Lwebitakuli Trading Center in Lwebitakuli district Mateete branch, Lyantonde and Lwengo served by and in Buyaga trading centre in Lyantonde district. Lwebitakuli and Buyaga branches. YEARBOOK 2011
1 Author: Justine Kasoma, BoU/GIZ FSD Programme 2 ‘Institutional members’ include schools AGRICULTURAL FINANCE AGRICULTURAL Competition animal husbandry are predominant. Perennial crops grown include coffee and matooke. On The strategic location of MAMCOT branches in average, each recognised agri-business SACCO the busy trading centers of Mateete, Lwebitakuli member (there are 446 of these) holds 10 acres of and Buyaga gives the SACCO its competitive edge coffee and 4-5 acres of matooke. Seasonal crops, over other institutions in the region. However, including maize, beans, millet, sorghum, peas, competition from informal financial institutions onions and pineapples are grown basically for is noticeable. Although there is inadequate home consumption and the surplus is sold. On information about the informal financial services average each member in this trade has 3-4 acres providers in Sembabule and other neighbouring in these crops. districts, it’s evident that money lenders have a niche among the business community primarily Market
because they provide fast access to credit to SACCOs and MFIs
desperate borrowers. Coffee produce is sold in the local market which 05 is characterised by middlemen. However, some On the formal/semi-formal side, MAMCOT is members have formed cooperatives, for example, faced with competition from Taala ya Mawogola Kibinge Coffee Farmers Cooperative at Kyabakaga SACCO which was initially closed but later and Misanvu Coffee Farmers Cooperative, both reopened in December 2011 in Mateete trading under NUCAFE. center, Lwebitakuli SACCO at Lwebitakuli (Lwebitakuli branch location), Sembabule SACCO Maize is directly supplied to maize millers in at Sembabule, and Mpumudde Elderly SACCO at Kisenyi, Kampala while matooke is mainly bought Mpumudde. direct from the farms by traders who supply it to markets in Kampala. One of the large scale The nearest formal financial institutions, matooke farmers, Mr. Kafeero Thadeus, also Stanbic Bank and FINCA Uganda are located supplies his matooke produce to Uganda Martyrs approximately 20km away in Sembabule town. University, Nkozi. This distance coupled with the poor road network makes MAMCOT the convenient choice for the Animal husbandry is mainly practised in community. Lyantonde district which is in the cattle corridor. Lyantonde district formed Buyaga Cooperative The Board members and management of Farmers Group and set up a collection centre for MAMCOT are aware of these market dynamics, milk. It is transported to Lyantonde town, which and therefore make efforts to consolidate is one of the major collection centres in the region. the already good operational and financial From here it is transported to the Sameer Group performance to deepen and expand outreach in factory in Kampala for processing. order to stay ahead of competition. Products 129 Economic activity The agricultural loans offered by MAMCOT are The major economic activity in the area of coverage very flexible, affordable and customer-tailored, the is agriculture and this is reflected by the percentage terms and conditions are considerate3, with grace YEARBOOK 2011
of agricultural loans at 53.7%. Crop growing and periods that vary with the type of crops grown.
3 Editors’ Note: the reader may notice that this attention to sensible grace periods for agricultural loans was cited in the Yearbook for 2009 (page 118) as being one reason for the success of Kyamuhunga SACCO. Other SACCOs operating in agricultural areas $ 5 5 $ $$ 5 ' J J $ 5! AGRICULTURAL FINANCE AGRICULTURAL Table 1: Agricultural Loan Grace Periods and Tenors
Purpose Grace period Loan Term - Tenor Maize and Beans 5 months 6 months Coffee 10 months 11 months Cattle 4 months 6 months
NB: All these are working capital loans, disbursed in favourable seasons/periods as agreed upon with the clients and outlined in the lending policy.
The interest rate charged on agricultural loans Section 2: Growth in recent years is lower than that for other loan products; agricultural loans 2.5% per month, other loans As indicated in the MAMCOT management and 3%, both types calculated on a declining balance. account reports, the institution has experienced progressive growth over the past 4 years. Mr. The group/community banking methodology Ssonko Fred, a loan officer at Mateete branch used in MAMCOT is a favorable option for attributes this growth to the quality of their women and youth who have no valuable assets products and services that are customer- tailored to to offer as collateral for small loans to boost their suit the needs and requirements of the community businesses. and activities in which they are engaged.
Table 2: Current MAMCOT Loan Products
Beans and Coffee Cattle School Trade and Transport Solar Housing maize working loan fees commerce working capital loan capital Accessible Aug–Sept Sept-Oct Jan – Dec Jan-Dec Jan–Dec Jan–Dec Jan–Dec Jan–Dec period Feb-Mar Apr-May Loan period 6 mths 11 mths 6 mths 4-6 mths 12 mths 15 mths 12 mths 15 mths Grace period 5 mths 10 mths 4 mths 0 0 0 0 0 Interest rate 2.5% p.m 2.5% p.m 2.5% p.m 3% p.m 3% p.m 3% p.m 3% p.m 3% p.m declining declining declining declining declining declining declining declining Minimum 1M 1M 1M 0.1M 0.1M - 0.1M - amount UShs Maximum 3M 3M 15M 3M 10M * 8M 10M amount UShs Repayment End of End of End of Monthly Monthly Monthly Monthly Monthly frequency period period period
Notes Other enterprises financed include: small scale retail and wholesale shops, milk collection centers, 130 * For motorcycle loans, MAMCOT funds up poultry farming, piggery, goat and sheep farms, to 90% of the cost of the motorcycle and for mobile money kiosks, metal workshops, wood motor vehicle loans, MAMCOT funds up to workshops, lumbering among others. 60% of the cost of the motor vehicle. YEARBOOK 2011
AGRICULTURAL FINANCE AGRICULTURAL Table 3: Distribution and performance of the SACCO loan portfolio 2008 2009 2010 2011 Number Amount Number Amount Number Amount Number Amount of UShs 000 of UShs 000 of UShs 000 of UShs 000 accounts accounts accounts accounts Agriculture 194 178,348 268 303,362 389 367,151 446 550,282 (production, processing and Marketing) Trade and 81 51,573 93 78,138 149 122,787 140 99,624 commerce Education 23 9,824 26 10,008 36 2,743 23 12,048 Housing/property 26 34,889 41 32,385 45 65,230 101 147,947 Health 7 2,295 7 1,370 5 512 4 1,133 19 28,915 64 32,385 122 169,604 177 214,459
Others(transport, SACCOs and MFIs energy) Total 350 305,846 499 536,373 747 738,030 891 1,025,494 05 Portfolio yield 41.6% 34.7% 48.2% 38.2% (Source: MAMCOT management and accounts reports as at 31st December 2011)
Other factors that give MAMCOT a competitive UCA offers routine supervision and edge include: monitoring of the MAMCOT’s services, a) Cultivation of a good public image due to capacity building to staff through quality services and outstanding customer workshops, trainings and seminars as care4; well as training members. It has always b) Providing attractive interest rates on member’s supported MAMCOT in mobilising savings, for example: members and training them through MAMCOT pays 4% per annum on mobilisation meetings and pre-annual voluntary savings, while other institutions general meetings; in the area do not provide this benefit; GIZ provided MAMCOT equipment like Attractive rates on fixed deposits; motorcycles that have greatly improved the movements of the field staff given the poor Term (months) 3 6 9 12 road network in its operational area. It has Interest (per annum) 8% 10% 12% 14% also donated computers and the MBWin system to MAMCOT’s three branches. Finally through technical assistance it has Limited competition for MAMCOT supported MAMCOT and other partner branches in Buyaga and Lwebitakuli; SACCOs in staff development through Has a strong affiliation with Uganda seminars, workshops and training by Cooperative Alliance (UCA), The German experienced trainers and practitioners; International Cooperation (GIZ), Centre MSCL has always been the major source for Private Sector Development Ltd 131 of external funds, with loans extended (CPSDL), The Microfinance Support at subsidized interest rates. (See Table 4 Centre Ltd (MSCL) and Stromme below.) Microfinance East Africa; YEARBOOK 2011
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