Monday, 11 February 2013

Erussi SACCO - DAY 1

February 23rd

Our day started early.  We had planned to meet with the Erussi SACCO at 9am.  Erussi is only 24 km from our base in Nebbi but it is a long, hard 24km; even in the current dry season, it would take us about 2 hrs to get there.  The roads were in very rough shape - many sections showed signs of washout from the heavy downpours of the rainy season.

As we drove, we gained about 3000ft.  We saw many small villages along the way and the view was spectacular.  Looking east, we could see the Congo and the smoldering smoke signals revealing that they had experienced the same grassland fires as we had encountered the previous day.

When we finally arrived at the SACCO, we were about a half hour late. I began to worry that we were making a poor first impression with the SACCO staff and board of directors.  Given the route that we had taken, our delay seemed reasonable;  I started to understand how difficult it would be to remain on schedule while in Africa.   Thankfully, many of the other participants in today's session were also delayed and no one seemed bothered by the delay.

As discussed the day's agenda with Gabriel, our UCA field rep, it became obvious that we had very different expectations of our purpose and focus while at the SACCO.

CCA had received feedback from previous coaches that many of the challenges faced by SACCOs were very similar.  They included:

1. Savings Mobilization - convincing members to save money
2. Capital Management - balancing the requests from members for loans/withdrawals resources.
3.  Human Resources - succession planning, compensation, recruitment etc.
4.  Lending - how to critically assess member's ability to repay loans
5.  Governance - role of board, board elections, conflict of interest etc
6.  Strategic Planning - focusing on positioning SACCO for future success

To help coaches be more effective, CCA (with the help from some of the coaches) developed some tools for coaches to use when interviewing the SACCOs staff, management and board.  These tools provided potential questions to ask and proposed 'best practice' solutions or recommendations for coaches.  While coaches were free to discuss any topic of interest, these tools provided a foundational framework to guide the discussions.

We had understood that these tools were for CCA/UCA purposes but that understand was not shared with our Ugandan partners.  Gabriel had taken the initiative to share these tools with the SACCOs that we were going to visit.  While CCA had prepared us to use these tools to guide our coaching, the SACCOs were expecting to spend three days in training to learn how to use these tools.

One of the selection criteria for coaches was flexibility and adaptability.  Given the situation we encountered, it seemed that these would be important attributes for a successful CCA coach.

So, after Vanessa and I had a brief discussion, we decided to use the tools in a slightly different way; we would use them as a platform for interactive training where we would identify the SACCOs challenges and discuss potential solutions.  While this was a bit more labour intensive method, it struck a balance between the different expectations of CCA, UCA and the Erussi SACCO.

We convened in a room behind the SACCO that, we later learned (more on this later), was used as a movie theatre on Market Days in Erussi.  Flip chart paper was affixed to the walls; Gabriel began by setting out a detailed agenda.

He facilitated the start of the session and helped us understand the expectations of each participant.  Some of them were quite funny; someone wanted to focus on time management so that we could leave early, Gabriel indicated that phones were to be on silent or turned off (this would never happen and, ironically, Gabriel's phone was the first to ring :) ) and that there should be no 'unnecessary movements' (this had the same outcome as the silent phones policy).

I am pretty sure that most Canadians would attest to the fact that many of us are 'slaves' to our cellphones.  Ugandans are much more focused on their phones than we are.  Not only do their phones ring during (important?) meetings but they will leave the meeting to answer the call.  For us, this would be something that took some getting use to.  My immediate response was to take it personally and be somewhat insulted by it; I had to remind myself that this was a different culture and acceptable behavior is culturally defined. 

During the course of the day, I learned that many of my expectations are culturally defined.  When we would be working through the tools, we would ask the participants for their input.  Often we would face blank stares.  It took some time for our new Uganda friends to learn that we would not be providing the answers and that they needed to be engaged for the sessions to proceed; I am not sure if they were just shy or if the predominant pedagogy in Ugandan schools was less interactive but as we moved through the day, they slowly began to open up and share their thoughts.

In our little room, it would reach 35C by mid-morning and we all found it difficult to focus.  Our schedule was marked by a tea break at 11am and a lunch break at 1pm.  These were very important to provide a break in the day and give us time to refuel.  Lunch was brought in and we enjoyed a meal of beef, rice, matooke and cassava/millet bread.  This bread was a local staple made from millet and the local cassava root.  The bread is served in a dough-like state. 

Here is a blog on this unique  bread:  (  While our host would fill their plate with this, I couldn't get my palate to agree with it.

The training went quite well as we covered a lot of ground and seemed to make some progress on potential solutions for challenges faced in Human Resources, Lending and Savings Mobilization.

When we reviewed the latest report from Brian, the Branch Manager, to the Board of Directors, I was surprised to learn that the staff were requesting a 40% wage increase.  When we discussed this with the group, it seemed that the staff were being underpaid and there was a significant risk of losing staff to better paying jobs.  As it is, it seemed that most staff have to find outside sources of income (like having their own farm) to make ends meet.

We talked about various compensation strategies and highlighted the motivational benefits of a meaningful bonus and contrasted that with simply increasing the base salary of the staff.  The cost of living increase was discussed in terms of the purchasing power of staff's salary - that food costs will naturally rise with inflation and it is only fair that staff should always be able to buy the same amount of food with their paycheck.  I sincerely hope that the board consider these recommendations carefully as they have a strong team and the SACCO could really suffer if they don't address these challenges and lost some key staff.

During our discussions about loan delinquencies and lending, I was shocked to learn that members must physically present themselves to the branch to make their loan payment - even if they had funds in their account.  If they did not show up to make the payment, the loans officer would jump on his motorcycle and go about collecting from farmers in their fields.  This seemed to be a high risk way of dealing with loan payments since, by the end of a collection run, he could wind up with almost 6 months salary in his jeans.  We talked about the risk of robbery, fraud and embezzlement.

Our recommendation was to consider having members sign standing letters of authorization to allow the SACCO to automatically withdraw funds from their accounts as their payments are due (as is done in Canada and around much of the world, I would suspect).  They thought that their members would not go for this; to which I countered that the main reason someone may not wish to have the SACCO go into their savings account on the agreed upon payment date to take the agreed upon payment would be that they may not really be planning to repay the loan in the first place.  I stressed that decisions need to be made in the best interest of all members, not simply the one requesting the loan at the time.

During our savings mobilization session, we came up with a list of 7 key benefits to joining the SACCO.  At Gabriel's recommendation, we boiled these down to just five benefits - the reason he wanted to use five is that you have five fingers on your hand and should be able to easily remember five reasons to join the SACCO. 

1.  Safekeeping of funds -

We were surprised to learn that, in addition to the usual downsides of keeping funds in your home (robbery, lack of interest earned), that Ugandans face a significant threat of having rats, mice and beetles eat their saved money!

2.  Interest Earned on Deposits/Dividends Paid on Shares

Inflation is a significant risk.  When the crops failed in Sept 2011, the inflation rate rose to almost 28% annually!!  In addition, they face volatile pricing in their staple goods as the price rises and falls with supply - largely dictated by the length of time since the last harvest.

3.  Access to Loans

In Erussi, the only local organization to provide loans is the SACCO.  To access a loan, citizens need to become a member of the SACCO.  As in Canada, the local businesses and farmers can make much more profit if they can borrow money to invest in their production or business.

4.  One Member, One Vote

A fundamental principle of the co-operative movement, the One Member One Vote benefit of memberships provides individual members with a voice in how the SACCO is operated.

5.  Raise the Collective Prosperity of the Community

By pooling their savings and providing the SACCO with the means to grant loans to their friends and family, members contribute to the economic growth of their communities.

We stressed that each member of staff, management and board should be able to recite these reasons in their own way- they needed to formulate their pitch so that it provided meaning to their audience (members of the Erussi community). 

We put forward a challenge to the participants - we would be asking them for their 'SACCO pitch' in the morning.

All in all, it was a great day of training.  We learned some surprising things about the SACCO and were very impressed by how well they operated their SACCO without the advantage of power or computers.

We looked forward to hearing their pitch in the morning....


  1. I am going to Uganda with CNFA in a few weeks to train SACCOS on the importance of savings and borrowing basics. This blog was very helpful. Could you steer me to any other resources?

  2. I was recently appointed chairman of a SACCO that my work colleagues and i intend on forming. however am open to any form of advise available as its going to be my first time managing a SACCO and i intend on making it successful.