Rwandan government could miss the December deadline for starting a co-operative bank as the automation of Savings and Credit Societies (Saccos) falls behind schedule.
According to former Trade, Industry and East African Community Affairs Minister Francois Kanimba, progress has been stalled by inconsistencies and errors in the financial reports of saccos.
Besides, the consultancy firms that had been contracted to implement the automation process were suspended over non-performance, further slowing the progress.
The government has now hired new auditors to clean up data for saccos across the country.
“The Saccos were found to be full of inconsistencies and it takes a lot of time to reconcile them and get clean financial reports,” said Mr Kanimba, adding that the problem arose because the institutions lacked skilled book keepers.
Feasibility and technical studies for the government’s co-operative bank had been finalised, but implementation could not proceed as the Saccos were still using manual systems that were susceptible to manipulation and there was poor management of members’ contributions.
Several cases of fraud and embezzlement had been registered and audits by the Rwanda Co-operative Agency (RCA) showed that millions of members’ contributions were lost through mismanagement and embezzlements by rogue managers.
RCA initially planned to have the automation completed by June to pave the way for a December opening of the co-operative bank.
There is a plan to merge saccos in every district into a single entity that would then have a stake in the co-operative bank. This is expected to improve service delivery for members through products like ATMs, mobile banking and agent banking.
There are more than 400 Saccos in the country serving about two million people, mainly low-income earners with limited access to formal banking services.