Kampala — POST Bank could lose the deal to be a lead agent for the distribution of the Prosperity for All funds as the government seeks a "multi-pronged approach" to deliver the financial services to households.

According to the multi-pronged approach adopted by the government, the country has been mapped into 15 financial zones that will be served by one locally based and regionally owned institution.

Although the plan is yet to be implemented it throws the much hyped poverty alleviation scheme into further disrepute amid fears that the plan is likely to cause massive financial loss to the government.

According to a statement sent out last month Mr Caleb Akandwanaho, the minister of state for finance in charge of microfinance, the regional institutions will among other things, bring a competitive spirit within the region and focus on more intense mobilisation by political and other leaders.

He said it will provide an opportunity for Savings and Credit Corporative Organisations (Saccos) to own the regional institution and build on existing institutions.

The question that arises though is whether these Saccos have the capacity to manage such huge sums of money.

"They are not well prepared. Most of them didn't have permanent places or office where they could operate from," the Masindi Chief Administrative Officer, Mr Milton Kato, said lasst week.

Masindi District has been the first to receive the Prosperity for All funds. About Shs500 million was disbursed by the ministry of Finance for distribution by Post Bank for the district.

But as it turns out only one Sacco in Budongo sub country in Masindi District has so far accessed part of this money. The rest of the Sacs, according to Mr Kato are far from being ready and lack the technical and organisation skills to effectively utilise and account for the funds.

"They thought they would get the money straight away, but they are supposed to mobilise themselves," he said, adding that; "People are still waiting. Others are tired of waiting. They are anxious to see the programme take off, but we are telling them that the programme is on."

Post Bank however denied any knowledge of an impending lose of the deal.

"I haven't received any communication to stop us from lending to Saccos. We still have the mandate and we are continuing with the distribution process," Mr Stephen Mukweli, the Post Bank managing director, said.

According to initial plans, Post Bank in which the government has majority stake was identified to distribute the funds. The bank has a presence in over 17 districts countrywide and was seen by the government as the ideal institution to drive the scheme.

In an earlier interview with Business Power, Mr Mukweli said they plan to operationalise about 300 Saccos in the areas of their operation but these are too few given than the country has over 80 districts and more than 900 sub counties.

Each of these sub-counties is supposed to have at least one Sacco. How these would be covered is a question that the government must deal with.

The government could chose to use other commercial banks that operate in areas where Post Bank does not have branches.

The advantage is that these banks at a fee would monitor through their loan personnel the performance of these funds and advise the Saccos on the best way to manage them.

According to the Rural Finance Strategy, contained in the Microfinance Policy Framework document that lays down the guidelines for the operationalisation of bona baggagawale, Saccos are the pivotal tool for the disbursement of the fund therefore more attention would be focused on their capacity to manage these funds to avoid a repeat of earlier disbursements under the entandikwa scheme.

The RFS has four components, namely: support for the formation of Saccos in sub-counties where none exist to ensure the population has easy access to affordable financial service points; strengthening of existing Saccos to support the nationwide financial infrastructure of Saccos by creating one strong and viable Sacco in the sub-county; instituting effective Sacco supervision and regulation arrangements to ensure better management of services delivery and to build confidence in the community to entrust their savings with Saccos; and access to wholesale funds to ensure that the Saccos obtain access wholesale funds for lending to their clients.

This requires that the Saccos are given adequate skills to manage over Shs20 billion earmarked for the programme.

On Friday, the UPDF passed out 30 soldiers after undergoing a two-weeks training on how to manage the money. These will be dispatched to different army locations to train others before Shs3.6 billion loan facility is released.

The task of training and capacity building for Saccos rests with the ministry of Finance and according to Mr Akandwanaho's statement; only five zones covering fewer than 20 districts out of 15 zones have relatively prepared lead institutions.