Arua Mother City SACCO Members Tipped On Insurance, GROW Project
Ronald Debo speaking to the members of Arua mother city SACCO on Sunday Photo Credit Andrew Cohen Amvesi
ARUA. The members of Arua mother city savings and credit cooperative organization (SACCO) have been trained on the need to embrace insurance and the generating growth opportunities and productivity for women enterprises (GROW) project which is being implemented by the government of Uganda.
The training was conducted by officials from the National Insurance Corporation (NIC) Life and Post Bank at the SACCO main office in Kenya Ward, Arua City on Sunday, September 1, 2024.
During the training, Anthony Joseph Lubanda, the Managing Director of NIC Life, encouraged the over 400 members of Arua mother city SACCO to join insurance so as to cover their credit against eventualities.
“So, when a local person like a member of Arua mother city SACCO picks a loan and for some incidence for example dies before completing the loan, then NIC Life will come in to clear the outstanding loan together with his or her fixed interest,” Lubanda said.
He added that: “What all that does is, it protects the assets that this borrower put up as security for the loan and also brings some sort of relief to the family such that even if they are mourning the loss of their member, they don’t again mourn the loss of the property since the insurance company, NIC will come in and clear the outstanding loan.”
Lubanda also noted that in the event that the borrower becomes permanently disabled and is unable to continue working, the insurance company will come in to pay part of the loan such that as the member is reorganizing to recover from the sickness, the SACCO doesn’t lose the money borrowed in totality.
“Should a member become critically ill and suffers from critical illness like cancer, heart disease and the like, the insurance company comes in and pays 50 percent of the loan. And we also add on some benefits for example if a main member dies, we contribute some school fees for the children and if they lose their spouse, we also contribute some burial expenses and all that is covered under the creditor’s insurance,” Lubanda explained.
On the GROW project, Kizito Enzama, the officer in charge of personal banking at Post Bank Arua Branch, said they came to talk to the SACCO members on how their businesses can be boosted through the new financing solution that the government has given to prosper and grow their businesses.
“The GROW product that is administered by Post Bank has two main components; the secured component and unsecured component. The secured component is for those who do have securities substantial enough to guarantee loans for the period the loan is running and these are landed properties, motor vehicles and different forms of securities. Now, this specific one only applies to those who are picking money between shs4m up to shs200m and it runs for a period of two years,” Enzama said.
He observed that to qualify for the secured component of GROW project, one’s business must have been operating for a minimum of two years for purposes of understanding the dynamics of the business and how to manage it including mastering the areas of cash flow to ensure continuity.
“The unsecured component, basically, is for those who are in registered savings groups that have specific saving circles and they also do sharing at the end of the year. Now why this was brought in is, we have women who do not have securities; they don’t have property but they have businesses that need financing. Now we are saying we are covering such women, we are able to give them this money to a tune of up to shs5m but you must be an active member of a group and saving actively, and for those categories, the loan will only run for a period of up to 8 months, not beyond, because it is unsecured and the risks associated with it are quite many,” Enzama explained.
Rehema Atutua, a member of Arua mother city SACCO, said the training has helped her to learn about insurance which she at first thought was only meant for vehicles and other assets.
“But today, when these people came, they were able to enlighten us on individual benefits a person can get after becoming a member of an insurance company, so I’m so glad for that. And for the GROW project, it has also helped me. Like for example in Arua mother city SACCO, the group members have now increased in number and the support which we were getting was only from the managing director whereby you get some of the groups which are eager to get loans but there is no finance. The money is little but the number of people in need of loan is big,” Atutua remarked.
She said as a result, some of the groups which have failed to get loans in time have become inactive thinking that they have been left out.
“Since GROW project has come in, it means we as Arua mother city SACCO are going to get more members because Post Bank is going to bridge the gap. That was the good part of today’s training,” Atutua stated.
Sali Drasi, the Manager Arua mother city SACCO, equally said the training was very important for his members because they needed to be educated on insurance and how to benefit from the GROW project which was done successfully.
Dr. Ronald Debo, the chairperson National Chamber of Commerce and Industry, Arua branch, asserted that the first group they have engaged as chamber for such a training is Arua mother city SACCO.
He said there are many other SACCOs they want to reach out to so that they can get the same knowledge on insurance and how to access GROW funds to support their businesses to prosper.