Many Microfinance Institutions may be craving for a share of the bonna bagaggawale funds but not Lwengo Microfinance Cooperatives and savings trust Ltd in Masaka district. Its members are worried that their institution could collapse if it implemented the program.
Lwengo Microfinance Cooperatives and savings trust Ltd in Masaka district is one of the 20 SACCOs in Masaka district through which government had hoped to channel funds under the Bonna Bagaggawale program which was officially launched last week by President Yoweri Museveni.
The SACCO was to serve Lwengo and Ndagwe sub Counties that make Bukoto Mid West Constituency. But its board of directors has resolved to reject the offer over fears that the program was designed to kill Microfinance institutions.
The SACCO’s General Secretary Venance Lubiito on Saturday told members during the launch of the Microfinance’s Agricultural Loan that the offer was rejected after scrutiny of the bonna bagaggawale program design which they say is no different from the policy that killed the Co-operative.
This decision was received with overwhelming support from the SACCO’s membership which contends that the program was ill conceived. Others argue that government should instead open up its own SACCO to handle the bonna bagaggawale funds.
The area Member of Parliament Isaac Ssejjoba who had become an advocate for the program was forced to back down. He later appealed to the Finance Ministry to redesign the program to suit the demands of the Microfinance institutions which are the major implementers.
According the Bonna Bagaggawale program design, government is to work with well established Microfinance institutions to loan out the funds at a 1% interest rate which the Microfinance Institutions are saying is too low for their operations.
