Savings and Credit Schemes in East and Southern Africa

The Agency for Cooperation and Research in Development(ACORD)carries out a rural development promotion programme in South Western Uganda named the Oruchinga Valley Rural Credit Society(OVRCS).

The aim of the credit scheme is to provide supplementary credit to rural producer groups at reasonable interest rates without collateral.

It also aims to serve as a stepping stone for target groups to become eligible for institutional credit by organising and operating their own credit programmes and by this, to help strengthen internal organisational and financial capabilities of the target groups.

The target group includes several defined categories of producers and investors. Small investment/producer groups for group investment or individual investment with loans obtained through the group and producer associations for association investments.

The credit scheme follows a grouping system with regard to prospective loanees but the loan disbursement method followed is unique. Under the scheme, primarily, a credit scheme is implemented within the group of prospective loanees. Funds for the scheme are accumulated by the group itself through membership fees, member deposits, group wage work, profits of group productive and commercial activities. Once the group operates a successful credit scheme within the group without outside assistance, the group can apply for credit from the OVRCS.

This project uses the Change Agent(CA)approach to implement and carry out its credit programme. Under the CA approach, CAs of ACORD live and work among the target group of rural farmers in the target area.

The role of the CAs is to carry out awareness building and participatory action research with the rural poor.

Those who respond to the CA activities are assisted by the CAs to build up their own small groups in order to carry out income generating activities.