Apex Bank’s Emmanuel Ngaujah said that in 2018 they were faced with huge challenge with regards loan repayment which led to the writing-off of over Le3 billion as their clients felt like the funds are gratis.  “They feel that it is a rural financial improvement program,” adding “due to the huge challenge in terms of loan recollection, the donors have exited the program” he said. Apex Bank is a wholesale bank providing financial services including first led supervision and technical support to a network of 17 Community Banks (CB’s) and 59 Financial Services Associations (FSA’s). It is now the responsibility of the CB’s and FSA’s to pay their staff and cover the full administrative costs. He said that they are grateful that they have staff quarters and offices for all the 76 institutions. He explained that most of the population in the rural poor have been marginalized financially that is why the project was conceived by IFAD through GoSL to ensure that money reaches the poor. They are the donor to the project, “they are the funding partner to ensure that we succeed.” As at December 2018 CB’s had a loan portfolio of Le57 billion, and FSA had Le45 billion. The Shareholders of the CB’s are over 40,000 whilst that of FSA’s are over 100,000. The CB’s in actually fact are not too different from normal commercial banks, they are depositing institutions that are typically and locally owned and operated. They tend to focus and tailor their services to the needs of the community they serve. They anchor their services on the door step of the customers and this is remote if you talk of commercial bank. FSA’s are community owned and managed financial institutions that mobilize savings through the sales of shares in poor rural communities - they are share-driven institutions. They generate their own income and out of what they generate is what they ought to use to disburse as loans. You should be a member of an FSA for you to access loan.

By Zainab Iyamide Joaque

Monday May 20, 2019.