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| Business |
| Saccos advocate for share protection laws |
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by
Aubrey Mchulu, 29 January 2007
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08:56:37
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The Canadian Cooperatives Association (CCA) said on Saturday it is advocating for new regulatory laws for Savings and Credit Cooperatives (Saccos) in Africa that will ensure protection of members’ contributions through, among other things, strict supervision by government in the same manner banks are checked.
CCA senior director for international development Jo-Anne Ferguson said in an interview in Blantyre most Saccos in Africa—Malawi inclusive—operate under the general Cooperatives Act which, she said, is not conducive as it does not tackle specific requirements of financial cooperatives.
“Financial cooperatives like Saccos have specific factors that need consideration such as consumer protection. Governments, therefore, should have an interest to ensure financial cooperatives operate under similar supervision to that of banks,” she said.
Chipping in, Malawi Savings and Credit Cooperatives (Muscco) senior operations manager Fumbani Nyangulu said the advocacy is coming at the right time when the Reserve Bank of Malawi (RBM) is working towards harmonising all financial services in the draft Financial Services Bill.
Nyangulu said the general tendency has been to mix micro-finance institutions and cooperatives which, he said, have two different roles.
“What we want is for cooperatives not to lose their identity but they must follow best practices at the end of the day,” he said.
Ferguson and her delegation were in the country to assess progress on a previous project that financed software for Saccos across the country.
During the visit, Ferguson and her two colleagues—Terry MacDonald and Monique Charron—visted Karonga Teachers’ Sacco, Dwasco Sacco in Nkhotakota, Bvumbwe Community Sacco in Thyolo, Fincoop in Lilongwe and Mudi Sacco in Blantyre.
Speaking during the meeting with Mudi Sacco directors on Saturday, Nyangulu said Muscco has worked with CCA for the past five years mostly through a project that subsidised software used by Saccos in the country. He said CCA also subsidises audit fees.
In his remarks, Mudi Sacco president Halifax Livata told the delegation that Mudi Sacco was first registered as Malawi Bureau of Standards (MBS) Sacco in December 1990 with 100 members before 12 other companies joined it and later changed its name to Mudi Sacco to reflect the wide membership from mostly firms located around the Mudi River catchment area in 2000.
Today, Livata said, Mudi Sacco has membership from 30 companies.
As at December 31, 2006, Livata said, Mudi Sacco’s membership stood at 1,574—1,016 males and 513 females. Its total assets were at K43.9 million (approximately US$319,000) out of which K34.5 million (approximately US$250,100) are members’ shares.
Livata said Mudi Sacco’s strategy include introduction of new products and meeting top management of all member organisations on several issues.
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