New approach targets agriculture

By Peter Muwonge

At the risk of being interpreted as back-tracking on the government's pledge to make all Ugandans rich through 'Bonna Bagaggawale', the Minister of Microfinance has warned that her ministry is set to tighten its policy to ensure that only those people engaged in active income generating initiatives receive government financial support.

Ruth Nankabirwa, the Minister for Microfinance and in charge of the government's Bonna Bagaggawale loan scheme said: "It is not for every body. Prosperity for all means all who are active and who are productive,"

Dr. Kazibwe (left) and Minister Ruth Nankabirwa

"If we are giving out coffee seedlings for example and you don't have land where to plant them, we are not going to buy you land where to plant the seedlings and therefore you will miss out." Nankabirwa said

Nankabirwa made the remarks this week in a news conference at the Media Centre during which she gave an update on the implementation of the programme since it was launched about three years ago. The Minister however lamented the attitudes of some of the beneficiaries and would-be beneficiaries.

Nankabirwa noted that some people have rejected funds with the view that the money is meant for NRM supporters. Some people, she said have neglected inputs provided under the scheme to lift them out of poverty, while others have failed to form cooperatives to pursue joint economic activities.

She cited an incident where some people had received coffee seedlings but left them to wilt on the verandas "Simply because their recipients couldn't dig holes to plant them,"

"When people hear of Bonna Bagaggawale money, they think we are going to their villages with packets of money and begin distributing." Nankabirwa lamented.

The Director of Uganda Micro Finance Support Center (UMSC) Charles Byanyima said that to date Ushs 37bn has been lent out to 611 Savings and Credit Cooperative Organizations (SACCOs) at an annual interest rate of 9%.

Byanyima noted though that despite the apparent large sums of money that have been disbursed, the programme is yet to record tangible benefits in terms of lifting the poorest people out of poverty.

Part of the problem, the officials noted, came from the fact that money was being used in other businesses and has not trickled down to the people it is meant to serve.

 As a result, Byanyima noted, the government has been forced to rethink the programme with new emphasis being agriculture as a way of improving household incomes.

At the same time however, Byanyima said that programme has given up to Ushs 14.8bn in loans to Non-SACCO micro-finance institutions. He however didn't explain whether the beneficiary micro-finance institutions are required to lend at the 9 percent interest rate that government set.

While the programme has recorded a relatively high rate of loan repayment of 85 percent of all total sums disbursed, Byanyima said, pockets of abuses still exist and most are brought about by mismanagement that leads to misappropriating of funds.

  Nankabirwa repeated her plea that the people of Buganda and Busoga need to change their attitudes towards the scheme because it is in the two regions where the programme is registering most weaknesses.

But the chairperson of the Microfinance Support Centre and former Vice President Dr. Specioza Wandira Kazibwe however insisted that even if the programme reaches a few economically active people "as skeptics insist" it will still have a multiplier effect of creating employment for those that do not get direct access to it.

"Every body doesn't need to get this money. Those that get it to run their projects are giving jobs to those who can't get it and ultimately every body will end up benefiting," Kazibwe said.
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