Managing a Shs 180bn SACCO

Col. Simon Ocan is the chief executive of Wazalendo, the SACCO for the Uganda People’s Defense Forces (UPDF). He spoke to Flavia Nassaka about their operations and pertinent issues to the cooperative movement in the country.

What are the key elements in your management style?

In management, there are three key things: vision, people and change. My management style is based on changing the life of the people at UPDF from dependence to financial Independence. That’s what drives the way I do things.

The last time I checked, Wazalendo had a membership of about 70,000 and an asset base of Shs 100 billion. Where do you stand so far in terms of membership and assets?

The membership has slightly reduced to 68,000 as some officers have been retiring. In terms of assets, we are bigger than some banks. We now stand at Shs 180 billion. When officers retire, we give them two options – either to stay or leave but some retired officers have chosen to save their pension.

You are just a few months old in this position. What is your vision?

I am the first CEO; we have been having General Managers before. We are looking at how to satisfy our customers and how to rebrand the products that we give them such that they buy more into the society. For instance, we have customised our products to make them really applicable to them. That’s why 95% of the members have taken loans and are doing well. Through innovation, we are the only SACCO where members can access money through an ATM system in Post Bank and the inter switch network. We have 19 branches across the country and an office in Somalia to cater for those outside the country. At each of these branches is a system of vetting applicants called the Unit policy and admin committee, which ensures that an individual qualifies to get a specific loan and will be able to handle it basing on their discipline. At the branches, we give loans of up to Shs 2 million. Beyond that, applications are handled by the department of operations, credit and banking at the head office in Kampala. Applications for loans between Shs 10 and Shs 20 million are handled by the credit committee at top management, and loans of Shs 40 million, which is the maximum we can offer, are handled by the board subcommittee. Employees of the Ministry of Defense can also be members as long as they draw their salary from the Defense Ministry.

Many SACCOs act as relief and not investment ventures, what informed the approach to your SACCO?

The SACCO is a brainchild of the late Gen. Aronda Nyakairima who found the situation of the soldier appalling after the Joseph Kony insurgencies. He saw the need to address the welfare of the soldier and after several consultations, the idea of a SACCO was approved.  We got a lot of training, which most SACCOs don’t engage in. Our SACCO was set out not to borrow money but for our members to learn how to save. They can borrow when they save. A lot of our budget goes to educating members and this gave us a firm foundation.

Many SACCOs come up but collapse within a few months or years. Where do you think they go wrong?

Some SACCOs don’t do an analysis of what they want to achieve. We did a solid analysis of the problem, came up with a solution and went ahead to educate members about the solution. We have now gone high-tech and are upgrading our system to match that of commercial banks. Bank of Uganda has proposed to us to become a bank but a bank will open up to the public and hike interest rates. Our focus is the welfare of the soldier that’s why our interest is low at 17%.

What in your view can be done to revive the cooperative movement in Uganda?

We have not taught a lot about cooperatives especially to those born after the 1960s when the cooperative movement was very strong. The government needs to champion that crusade to bring back the power of cooperatives. Many countries have developed because of cooperatives. We used to have a college of cooperatives in Masindi. That is where we should be training young people. Kenya has SACCOs that are very big.  Cooperatives can be revived if awareness about the benefits is made among citizens. Cooperatives are bigger than SACCOs but we can start by taking lessons from those succeeding at that level.

Where do you see Wazalendo in the near future?

We keep on revising our vision. There are a few things we’ve discussed but we have not yet concretised them. We think in a few years to come we should have an investment as a bank. We are looking at partnering with other SACCOs such as that of the Uganda Police Force to form a capital base and form a bank. What cannot change is the ideology of the SACCO because this benefits the members. The bank will be a side business of the SACCO.