PROFIRA

Project for Financial Inclusion in Rural Areas (PROFIRA) – Consortium Assignment

 

P
  roject Background

The Government of Uganda (GoU) and the International Fund for Agricultural Development (IFAD) jointly designed the Project for Financial Inclusion in Rural Areas. The implementation of this development project is majorly supported by an IFAD loan of around USD 30 million and grant of USD 6 million from GoU.  A Project Management Unit (PMU) under the Ministry of Finance, Planning and Economic Development (MFPED) is administering the project.

 

Project Objectives and Relevance

 

Overall, PROFIRA seeks to increase income, improve food security and reduce vulnerability in rural areas. The project’s development objective is to substantially increase access to and use of financial services by the rural poor population.

 

The objective of this assignment is to enhance the sustainability of SACCOs by building their capacities to self-govern, mobilize members and capital, manage their operations and finances, serve their members with appropriate training and products, and plan strategically. This will be accomplished through training in seven (7) key areas and technical assistance.

 

Targeted Outreach and Coverage

 

Though in the contract for UCA consortium was designed on 73 SACCO, 74 SACCOs were agreed on during SACCO allocation and we were required to handle a total 74 SACCOs in Western Uganda, in districts of Kasese, Bushenyi, Rubirizi, Mitooma, Buhweju, Ntungamo, Kanungu, Rukungiri, Kabarole, Mbarara, Kisoro, Kabale and

Isingiro.

 

OVERALL IMPLEMENTATION STATUS

 

  1. Quarter One:
    1. Preparation of Inception Report and profiling of the Consortium documents.
    2. Conducting Training Needs Assessment (TNA) and collecting SACCO data for monitoring and evaluation (M&E) purposes.
    3. Preparation of draft training materials for Financial Literacy and Deposit Mobilization, Financial Management, and SACCO Governance, including Checklists, Reporting Tools and Evaluation Forms.
    4. Orientation of Trainers and Formation of Training Teams.
    5. Deployment of trainers for conducting Financial Literacy and Deposit

Mobilization (onsite) and Financial Management (residential) training.

 

  1. Quarter Two:
    1. Completed the development of training materials for Financial Literacy and Deposit Mobilization, and Financial Management. These included a Training Curriculum and Session Plan for each training area, Checklists, Reporting Tools and Evaluation Forms.
    2. Continued with the development of training materials for SACCO Governance.
    3. Conducted on-site training in Financial Literacy and Deposit Mobilization for 25 SACCOs in Bushenyi and Ntungamo clusters.
    4. Conducted residential training in Financial Management for 28 SACCOs in Mbarara and Kabale clusters.

 

Quarter Three: 

  1. Completed the development of training materials for Savings and other product Development and Strategic planning. These included a Training manuals and guides, training hand out and Session Plan for each training area, Checklists, Reporting Tools and Evaluation Forms.
  2. Conducted residential training in Financial Management for 49 SACCOs from Kasese, Ntungamo, Kanungu and Bushenyi clusters.
  3. Held a planning meeting in Mbarara with DCOs, SACCO managers and trainers. The meeting with DCOs and trainers discussed issues of working in harmony to achieve a common objective, good collaboration on accessing reports and information to and from SACCOs and agreed on SACCO replacements.
  4. Conducted technical assistance and collecting reports from the 64 SACCOs.
  5. Identifying and suggesting 18 SACCOs for replacements, and conducting Training Needs Assessment/fields visit for their verification and recommendation to PMU

 

Quarter Four: 

  1. Conducted residential trainings in Strategic planning for 30 SACCOs from Kabale, Ntungamo, and Kanungu clusters.
  2. Conducted residential trainings in Savings and other Product development for 60 SACCOs in Ntungamo, Mbarara, Kasese and Bushenyi clusters.
  3. Held a planning meeting in Mbarara with DCOs, SACCO managers and trainers. The meeting with DCOs and trainers discussed issues of working in harmony to achieve a common objective, good collaboration on accessing reports and information to and from SACCOs and agreed on SACCO replacements.
  4. Provided technical assistance and collecting reports from the 74 SACCOs. Identifying and suggesting SACCOs for replacements, and conducting Training Needs Assessment/fields visit for their verification and recommendation to PMU.

 

 

Photographs for the Savings and other Product Development training in western Uganda, Mbarara District

 

ACHIEVEMENTS: 

 

Levels of achievements in relation to the planned in Quarter 1 to 4 of year one and plans for Year 2 Q1 and Q2

Training Module Planned for year one  as per te contract Actual

implemented

in relation to the contract

Divergence from the contact  Planned  for year 2

Q1 and Q2

(After concluding)

Training needs Assessment 74 74 +1 0
Savings and other product development 60 61 0 13
Financial Management 73 74 +1 0
Strategic Planning 30 30 0 43
SACCO Governance 0 0 0 73
Business skills development 0 0 0 73
Financial Literacy and deposit mobilization 25 25 0 48
Technical assistance and mentorship 73 74 +1 74

 

 

 

No

.

Interventions/Acti

vities      and     Set

Targets  

 Output Level Performance Indicators on  a Quarterly Basis Outcome Level

Performance Indicators on a semi-annual/ annual basis

1 SACCO

Governance

(Activity not Planned for in Year one )

 

 

No SACCO boards trained but SACCO mentorship or technical assistance has been provided continuously

Professional Board

The mean % of female Board members as at the end of year one is 34%  ( Appendix 3)

 

78% of the SACCOs have held Board Meetings once, 19%  have held Board

Meetings 6times and 3% have held the meetings three times in the last 6 months (see

Appendix 5 )

2 Financial Literacy and Deposit Mobilization Target:   

–        Training Curriculum and Session Plan in place

and in use

 

–        25 SACCOs trained in Financial

Literacy and

Deposit

Mobilisation

 

–        90 leaders and members per SACCO

attended the training a total of (2,250  participants)

 

2,667 SACCO members from 24 SACCOs were trained

–       Final copies of Training Curriculum and Session Plan for Financial Literacy and Deposit Mobilisation in place and copies were submitted to PMU and Uganda Cooperative College Kigumba (UCCK) for harmonisation.

 

–       2,667 SACCO members of 24 SACCOs trained and impact has been realised by the SACCOs and members that attended the trainings.

 

–       The specific areas of training included:

i) Introduction to Financial Literacy ii) Personal Financial Management – Setting Personal Financial Goals.

iii) Personal Budgeting   iv) Personal Savings

v) Equity & Debt Financing  vi) Personal Investment

Financially Literate

Members

 

93% of the trained members reported to have clear understanding of the

SACCO Products and services and most of them started with active savings in their SACCOs. SACCO Membership Increased and access to financial services seriously improves in credible SACCOs. Eg. Kyamuhunga Jubilee SACCO.

 

 

Total value of each type of product utilized has not yet been assessed

 

 

 

3 Business skills development

(Activity             not

Planned for in this quarter)

No SACCO Members trained

 

Skilled      Members      in

Business

Number of enterprises invested in through funding not yet assessed

4 Strategic Planning

Designing training Manuals was planned

30 SACCOs were planned for training)

Achieved:

-Training Manuals and Training Guides were developed.

– 30 SACCOs and 52SACCO Board members and 35 staff were trained, Activity of training was extended to quarter 4 Specific areas of training were:

•        Meaning of Strategic Planning

•        Importance of Strategic Planning

Growth Managed

23% of the SACCOs under UCA consortium that are classified under A+ (i.e. with membership > 1,000; & OSS

> 100%)

 

 

 

    •        The Major Components of a Strategic Plan

•        Articulating or Reviewing the SACCO’s Vision, Mission and

Values

•        Environmental Analysis

•        Defining the SACCO’s Strategy

•        Identifying Key Result Areas,

Setting Goals and SMART

Objectives

•        Developing an Operational Plan

•        Determining Resource Requirements

•        Developing a Financing Plan

•        Preparing Financial Projections

•        Monitoring and Reviewing the Strategic Plan

Action plans designed for SACCOs to finalize strategic Plans

Draft strategic plans for  each of the trained

SACCOs were designed and agreed on, they will be fine-tuned and finalized by the mentors and trainers during  Technical assistance time

.

5 Savings and Other

Product

Development/ Training Manuals and Training Guides were

developed

 

 

-Training Manuals and Guides were developed.

– 61 SACCOs and 107 SACCO Board members and staff were trained,

 

Activity of training was extended to quarter

4

Specific areas of training were:

•        Meaning of Savings

•        Why should SACCO members save?

•        When do we need Lump Sums?

•        Different forms of savings

•        Benefits of Savings

•        Advantages and Disadvantages of different forms of Savings  Savings Patterns   Why People Save?

•        Savings Mobilization, Why SACCOs should focus on savings mobilization and Savings Mobilization Principles

•        Pre-Conditions for Successful Savings

Mobilization, Challenges of Savings

Mobilization

•        Administration of Savings

•        Physical design/ improvement of the SACCO Savings Products, and Loan

Products, Features that make Savings Products attractive to members, Types of Savings Products, Prototype of Savings Product.(SACCO group

discussions)

•        Loan Management, Loan Management

Process, Credit Principles and Prototype of Loan Product.

•        Other Products offered by SACCOs

•        Setting effective interest rates

Increase in No. and type of products

 

A list of products that are already existing is shown in Appendix 4 and 6) Action plans designed for SACCOs to finalize the agreed 2 Proto type products specific for each of the 61 SACCOs and 107 trained Board and Staff.

 

Two Prototype products agreed on were deeply discussed and SACCO

Leaders were assigned to pilot and rollout the

Products.

 

Each of the agreed products will be fine-tuned and finalize with guidance of the mentors and trainer during Technical assistance period.

 

 

 

    •        Product development, Product development options, Product Levels,

Stages of Product Life

•        Major Stages in New Product Development

•        Product Management, Product Management Frame work,

Characteristics of Good Product

Managers

 
6. Financial

Management

 

Target:  

Training Manual and Training Guide in place and in use

 

Leaders of 182SACCOs

trained in

Financial

Management

 

leaders per

SACCO attended the training and have an action plan to improve their SACCO performance

No. of SACCOs and the staff trained (specify areas of training).

74 SACCOs and 289 SACCO leaders trained and agreed on the work plan for implementation in their SACCOs   Specific areas of training were:

 

Specific areas of training were:

•        Meaning of Financial Management

•        Managing Scarce Funds and Other Resources

•        Risk and Managing Risk and Fraud in SACCOs

•        Estimating the Amount of Capital Required in Running SACCO Business

•        Determining Capital Structure, Choice and Utilization of Funds

•        Elements of Financial Control and Financial Management

•        Tools of Sound Financial Management,

•        Internal Control and Financial Policies

•        Maintaining Books of  Account

•        Basic Accounting Books, Book Keeping as a critical step in the Accounting Cycle and usage of all kinds of Books used in a SACCO

•        Internal Control and Financial Policies

•        Preparation of Financial Statements

(Statement of Comprehensive Income,

Statement of Financial Position,

Statement of Cash Flows, Statement of

Changes in Equity and Notes to the

Accounts

•        Reporting and Types of Reports required by the SACCOs, Recipients of the Reports and Sources of Information for generation of Reports

•        Users of Accounting Information

•        SACCO Performance Standards and Indicators of Good Performance – this includes Growth and Sustainability

Indicators

•        Financial Control

81 % (62 SACCOs) of the SACCOs have f externally audited accounts

 

 

 

The average Liquidity Ratio is 24% meaning that some of the SACCOs are in a concerning state. It should however be noted that this is far greater that got in the baseline data

 

The average Profitability

Ratio is 12%

 

Level of Achievement; Monthly SACCO reports are now generated by each SACCO with guidance of the Technical advisor. Computation of the ratios (growth, profitability, liquidity) are being taken

care of during mentorship

 

Financial and accounting reports produced. Quarterly reports are generated from the SACCO records and submitted to UCA and

PMU

 

Audit reports for 2016 from

38 SACCOs have been submits. And we expect more from the rest of the

SACCOs

 

Records for a good number of SACCOs are not yet up to date and they are not really impressing. A lot is

 

 

Challenges
  1. Short time allocated for the training. The program required at least 5 effective days of training to enable participants fully discuss issues.
  2. Some SACCOs did not send the required number of participants (4 participants per SACCO)
  3. SACCOs were using different reporting formats, and not fully filling the form as require, making it had to collect all the relevant data.
  4. Some SACCOs do not properly keep good track of the records, generating a good report from the SACCOs is so difficult
  • There is also a problem of declining loan portfolio quality, poor financial management and stagnant membership, incomplete reports an issue that can be attributed to the fact that we haven’t carried out financial literacy trainings to some SACCOs in Kasese cluster.

 

How Challenges Were Addressed
    Estimating the Amount of Capital Required being done by our mentors and trainers to see to it that we get the required change

 

SACCOs have prepared and submitted their up to date reports.

Performance indicator Ratios will definitely improve once SACCO leaders take the advice we are giving them

  1. To attract participation of SACCOs whose members are used to transport facilitation, meals, and participation allowances, we emphasised personal and institutional benefits to be derived from the training. Eventually, SACCOs convinced to mobilize their members.
  2. We maintained flexible training methods, to ensure that the key messages were delivered in the time available.
  • We obtained the contacts of SACCO Chairpersons, management staff and other key persons to enable us send information to them and use them to remind participants about the training. We shall use the same strategy in future. iv) We encouraged participants to share the available pictorial information. v) We drew other pictures on flip charts during the training.
  1. vi) Participants agreed to begin keeping records o to guide them in generating good reports, mentors will make sure that SACCO records are properly made vii) Poor mobilization, we need to request SACCO Chairpersons and the management staff to send their detailed contacts so that we send them information in time.
  • SACCO leaders should lay strategies of reviving dormant members / accounts
  1. SACCOs were strongly advised not to be divided by politics, religion, and other affiliations but rather work as a team.

 

  1. The SACCO management staffs have been in close contact with UCAPROFIRA officials for a technical advice which has been carried out this quarter.

 

General Lessons Learnt

 

  1. We need to plan well our training interventions, to avoid challenges of low attendance basing on panting seasons and other community related aspects.
  2. There was a general need from all service providers for PROFIRA to adjusting funds release and relate it closely with the agreed deliverables. A request went to PMU to rescue the situation.
  • Learning from each other in terms of training or mentorship methodology and training contents.
  1. Accounting in detail: we need to cover most of the contents during mentorship because SACCOs and their leaders are not at the same levels of growth.
  2. In future, when conducting refresher trainings, it will be so important that trainings put into consideration the levels at which SACCOs are both in terms of growth and knowledge gap.

 

CONCLUSION

 

During the first year of implementation, the work done was mainly designing training materials for Financial Literacy, Financial Management, Strategic planning, Savings and other product development, Governance, and conducting trainings in all the first four Modules. We also provided providing technical assistance/ mentorship to the 74 SACCOs 18 of which were replacements from the original allocated to us. A good number of SACCO Leaders and SACCO Members benefited from the trainings and technical support provided during the period. Recommendations put forward to PMU have been based on a careful analysis as per the training assessment, and relation to the needs and interests of the SACCOs. It is critical for us to take the lessons learnt so serious for better implementation to achieve the intended objectives. It is equally important that PROFIRA PMU take into consideration the above recommendations in order for the SACCOs to streamline their financial operations and overall growth. This will ultimately lead to attainment of the desired project objective of Improved SACCO performance over time.

 

SACCO better performance include: Increase in SACCO membership (Outreach), Increased members’ savings deposit and safety, Increased member participation and patronage, Quality operating self-sufficiency, Quality financial self-sufficiency, Share capital and equity financing, High Quality loan portfolio management, Reduced risks and conflicting interests following the Benchmarks as per SACCO Performance standards. g