Savings and Credit Schemes in East and Southern Africa

The Agency for Cooperation and Research 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 to help target groups to become eligible for institutional credit by organising and operating their own credit programmes and by this, to help strenghten internal organisational and financial capabilities of the target groups.

Target groups include several defined categories of producers and investors.

The credit scheme follows a grouping system where primarily, a credit scheme is implemented within the group of prospective loanees, funds for which are collected by the members. Once the group operates a successful credit scheme within the group independantly without outside assistance,it can apply for credit from the OVRCS.

To be eligible for OVRCS loans, a group must fit into strict requirements.

The group must have existed as a continuously operating group for at least one and a half years, during which time there must have been at least one group meeting monthly with good attendance.

The group must have its aims and objectives and rules and regulations clearly set out and officially adopted by its membership.The group must have a minimum of 5 and a maximum of 25 members.

It must show up to date accounts depicting cash and bank holdings, loans, repayments and deposits.

If the group is applying for a loan on behalf of an individual member, it must have operated an internal member loan programme for 9 months with a capital amount specified by the OVRCs.

The group must determine the eligibility of their own individual members for participation in the credit programme.

Individual members applying through the group for loans must have lived in the area for at least 6 months.

Upon meeting all the above requirements to the satisfaction of OVRCS, loans are disbursed to groups as whole units or as single loans where the group applies on behalf of an individual member.