The purpose of this blog is to allow customer owners of Leading Edge Credit Union to gain access to financial tips, information about Leading Edge Credit Union, and also about me, Cory Munden. I will keep the content fresh and interesting with the intention that viewers will see value in reading the content and also refer others. Enjoy!
Approximately two hours outside of the capital city of Kampala, Uganda is the trading center of Kungulimera. A trading center is basically a hub point where merchants gather with shops (not stores I learned) that service outlining communities. The SACCO is on the main street, smack in the middle of the hustle and bustle of activity. There is a goat under the SACCO sign and just up from the entrance is a huge pile of fresh pineapples that farmers are offloading from a fresh harvest. We are greeted by a kind and gentle armed guard with a warm smile. It's already warming up and we instantly start to sweat. The guard tells us it is also hot for them. We enter the premise after posing for a few pictures with my new guard friend. Immediately I notice on the wall of the manager/loans officer office something very interesting. They have handwritten the list of the board members, the committees, the mission, the values, and the goals of the Sacco on the wall. They also had their budget in plain view as well as all their results for the last 12 months. I could immediately tell this was a SACCO that was organized and proud.
The introductions followed with the management team and members of the board. The people are so friendly and accommodating and it was an easy transition from stranger to partner. The Canadian Coaching program is a partnership in its highest form. This SACCO is very proud to have the rare opportunity to host Canadian coaches. We learned that just our presence in their town will demonstrate strength in their SACCO and spread good will. This was quite evident in later discussions with merchants and members.
We are sitting in a room in Uganda waiting for the audience to outline their challenges, when the manager insists we go for Breakfast as his guests. We make our way down through town to a quaint little restaurant where I get to try African tea. It is warm milk with a hint of spice. We have some informal discussions before heading back to the office to get down to business. The questions ranged from delinquency management and building a new premises, to branching in other locations. It was a great dialogue and the chair of the board did a great job to include everyone in the discussion. They were very proud of their gender equality philosophy. They had a great mix of women and men on both the board and staff. This may seem trivial to us, however, these are bold steps in Uganda. Traditionally, women played a homemaker role and were not involved in such commerce activity. To demonstrate this, we noticed that all the SACCO's we visited broke down their membership by male and female statistics. This is certainly not the practice in Canada as we do not differentiate the sex of a member or staff person. It was clear that the SACCO was liberal and innovative. Upon completing our analysis and gathering data for our report, it was time to see how this SACCO makes a difference in this trading center. We took a 15 minute drive on a dirt road to visit a farmer who focused on pineapples and other crops for their livelihood. We were greeted by a quiet, sweet lady that seemed quite shy by our presence. She had very limited English and her husband had left the farm to run errands, still she graciously agreed to give us a tour despite being pregnant. She described how the SACCO has provided loans to assist her and her husband with expanding the farm and increasing their livelihood. Her children now have the opportunity to go to school and get an education because they can afford the school fees. This story seems to be the overall message we received with every visit. It was such a wonderful feeling to look into the eyes of this lady and realize that credit unions make a real difference and her family was going to be OK. What must be understood is the access to capital makes the difference. These families would not have access to money were it not for the SACCO. There are other agencies there, but they change interest rates in excess of 30% with unfavorable loan terms. We saw many vacant buildings that were a result of loans being called by these institutions. People stripped of their land and home. It is certainly easy to see why the SACCO is growing at such a rapid rate.
It is so hard to contain your thoughts on what the future could be like in this area. We visited another farm and the thoughts again started on "if only...". If only they had the money for a well to have an irrigation system and if only they had a small tractor. The next farmer had an amazing farm, but as we stood on a small hill he pointed out and told us his green crops are dying. The drought is having an impact despite trying to water the crops by hand. What I mean when I say "by hand" is he walks over 500 feet through rough terrain with two 20 liter jugs. He retrieves water from a hole that he had dug in the ground. It is mind blowing to think how labour intensive the management of his farm is. The heat, at this point, is taking its toll as we tuck under some sugar canes to interview the farmer. Shielded from the sun we begin to ask questions, however I cannot help but notice his farm workers continuing to work in the field with equipment we would simply cast aside. The farmers son joins us and listens in his dad describes his challenges and the difference the SACCO made in his life.
Small business member
We made our way back to our hotel, and while driving the roads and witnessing people going about their business, I tried to challenge myself on what I learned today. I believe that this experience is not only about delivering a well written report to assist our SACCO friends, it's also about learning something. I realized that this SACCO prides itself on disclosure and allowing the membership to be a part of their organization far more than any other credit union I've ever experienced. The membership, after all, has it all on the line. The failure of the SACCO can mean the demise of the community. If the membership cannot safely deposit or gain access to capital, they cannot expand, invest, or improve themselves. This SACCO recognizes this and is very transparent with its activity; ensuring members take comfort in knowing the strategic direction. It made me think of our own annual general meeting and how important it is to ensure members see where the credit union is heading and the impact it will have on them. It would also be great if I get some feedback on their thoughts. This is the value proposition of being a member after all.
After a great visit with the Kungulimera SACCO, we arranged a visit to the Kungulimera Area Cooperative Alliance (ACE). The ACE was created for one simple reason; to bring groups of farmers together to sell their crops at a better price, and introduce them to new markets. A cluster of farmers in an area get together in whats termed an RPO (Rural Producer Organization). The RPO's then become members of the ACE to form a larger group. In the Kungulimera ACE, there are approximately 28 RPO's which consists of over 1450 farmers. In the past, these individual farmers would not work in cooperation to sell their product in the trade centers and wherever they could yield sales. Larger organizations, serving as middlemen, bought much of the product from the farmers at deep discounts and then took it to market to make large profits. The farmers were on the losing end and at the mercy of the middleman. Today, the ACE works with the farmers to provide training, support, and most importantly, a market with a much higher price. Due to the larger volume that the ACE can now collect, they can market to Sudan, Kenya, and the Congo. The farmer gets money for his crop right away, alleviating the pain of waiting for the product to sell and the risk of loss due to potential spoilage. The ACE also borrows from the SACCO to pay the farmer, which is good business for the SACCO. In this triangle of commerce, it is a true demonstration of how cooperatives can work together for the good of a community.
The ACE we visited has high aspirations. They just started to do value added processing, which is the first evidence of this strategy that I witnessed. On a tour of their location, they showed us how they make pineapple juice and wine. Producing juice for local schools is just a bonus for the community. They actually increase the profit on a pineapple fourfold. A raw pineapple will yield at best 1,000 shillings, but it will produce enough juice to generate about 10,000 shillings. Take out the cost of production, and it is easy to see the benefits. They are working on increasing the market, however, this will also provide them options when they have difficulty selling raw pineapples with a limited shelf life: bottle the juice (which contains no preservatives, by the way) and store for market. I purchased a bottle of pineapple wine and am saving it for home - but I am confident it will be delicious.
They also showed us their sun-dried pineapple operation that they are trying out. They have large solar units outside their building where they place the cut pineapple to be dried by the sun. Obviously the sun is present quite often and makes for a simple drying process. The drying units are simply plastic houses to magnify the sun's power. The issue they are having now is the packaging company will not sell them the bags, but want to do the packing themselves and label it for market. The ACE is getting hit with a middleman themselves and they are looking for a solution. I sampled this pineapple and, all I can say is I would eat this everyday! I truly hope they can gain access to the bags themselves and start producing dry pineapple and other fruit. They have so much access to raw material, and this would put more money back into the hands of the farmers, the ACE's , and the SACCO's. Oh, and they also want to produce cough syrup using pineapple juice and aloe, but that is my next blog, lol.
A value added product
I will soon be heading home, but what a great lesson in farming, cooperatives and partnerships. I cannot help but think about the Codroy Valley and the opportunities that are available. I am challenging myself to play a role in stimulating farming in this area by offering leadership and identifying how our credit union can be a strategic partner. Let's face it, I'd much prefer potatoes or other produce from our local farms than from some far-off land. How can we convince people to support it? What products are they looking for? What would encourage farmers to sell to the cooperative and become members? What are the barriers to farming? Maybe once we get the answers to these questions we can call on our friends from Uganda to assist us.