23 November 2008
editorial
Kampala — Members of Parliament, debating the report on the national economy, expressed concern that some organisations purporting to be microfinance institutions are fleecing Ugandans of millions of shillings.
MPs named Caring for Orphans, Widows and the Elderly (COWE); Dutch International; (ACID) and Together Everybody Achieves More (TEAM) as some of the culprits.
MPs asked the finance minister Dr Ezra Suruma to present to Parliament, within three weeks, a report on measures taken to regulate the microfinance institutions. They further asked the Minister of Internal Affairs to explain the action taken against the organisations.
In September this year, while on a tour of Kabale district, President Museveni received complaints from the local people that COWE had conned them of millions of shillings. The President consequently directed that the officials of COWE be arrested and prosecuted. He said the property of COWE officials would be seized and sold to recover the money which they got from the residents.
A fortnight after the President issued the directive, the Police reported that a company; TEAM had conned over 4,000 people in Jinja of an estimated sh3b. The company was linked to the same people who originally were running COWE. Although four TEAM officials were arrested in connection with the scam in Jinja, no steps were taken to enable the victims recover their money. The two cases - COWE and TEAM do point to one fact: The failure by Government to firmly deal with organisations masquerading as microfinance institutions to con unsuspecting Ugandans.
Thousands of people, particularly the poor in the rural areas, have lost money at the hands of fraudsters operating dubious organisations purporting to be microfinance institutions.
These dubious NGOs undermine public trust in the bona fide savings and credit cooperative societies as well as the government's Bonna Bagaggawale (Prosperity for All) programme. The Government, therefore, must firmly deal with these dubious NGOs. Government also has obligation to assist the victims to recover their money.
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