Kampala — A NEW law to regulate and check fraud in Savings and Credit Cooperative Organisations (SACCOs) is being drafted, an official of the microfinance ministry has said.

Kalanguka Kayondo, the officer in charge of microfinance institutions, said on Monday the law would also regularise Government funding to the cooperatives.

"I think it will be in place by late July. After that, SACCOs can apply directly to the Microfinance Support Centre (for loans)."

Kayondo added that the organisations that meet the requirements, would apply directly to the centre, which would release the money through Post Bank Uganda.

"Agricultural loans will carry an interest of 9% per annum, while commercial ones will be 13%," he explained.

Kayondo was speaking in Luweero town during a regional strategy seminar on the National Agricultural Advisory Services for leaders from the seven districts in eastern Buganda.

In the 2008/09 financial year, the Government allocated sh32b for the cooperatives, a key component of the Prosperity-For-All (Bonna Bagaggawale) programme

Earlier, district leaders had criticised the Government for taking too long to disburse money to the cooperatives.

"We have been telling people that there is big money coming, but they don't see it. We have been singing the SACCO song for so long and cannot sing it anymore.

"We have done the mobilisation. The people are ready," said James Wandera, the Nakasongola LC5 chairman.

Kalangala resident district commissioner Deo Nsereko blamed the delay on "too much bureaucracy."

Moses Kabuusu, the MP for Kyamuswa county in Kalangala suggested a stringent law to prevent the cooperatives from defrauding the public because "SACCOs have been formed and closed with people's money."

However, the Luweero resident district commissioner, Geoffrey Kyomukama, blamed a poor borrowing culture among the members for crippling the organisations.

"The problem is recovery. People have borrowed but have not paid back."

He asked the leaders to inculcate a culture of prompt loan repayment among the people.