As the Ministry of Finance, Planning and Economic Development applies a new shape to relatively salvage people from financial deficiency, I see many questions go unanswered if the new model will be effectual having nothing dissimilar from the first financial endeavours aimed to heave the community from poverty.
How unique will the Parish Model deliver results on financial services access in Uganda?
In the wake of the Ministry’s new proposal to pilot the Parish Model for Ugandan communities as a vehicle for financial access, I conclusively say that scores of them remain caught between a rock and a hard place, nursing the trauma experienced from the past failed approaches to financial access.
Numerous questions linger on in my mind about this mode of financial access by the person at the lowest level of the administrative unit in a country like Uganda where the trend in not new for the government to initiate conduits that would get money downward.
Will the Parish Model deliver Ugandans to financial access full potential?
Looking at the past financial schemes like Entandikwa Fund, Youth Livelihood Fund, Bonabagagawale Programme, the rise and fall of the Uganda Cooperative Bank and now the Emyooga Fund, has there been a full diagnosis to them, well done to guide the Ministry of Finance on the next steps?
To me, the answer to appropriate and self-help centred access to financial services is purely found with deliberate government policy to revive cooperatives in Uganda, providing conducive economic growth environment for them while the struggling community saving groups and surviving agricultural cooperatives brave odds to become bankable.
My analysis of the new scheme, the Parish Model is a replica of the Ujamaa Villages as initiated by the former President of Tanzania, Mwalimu Julius Kambarage Nyerere and the Mayumba Tano Model as first piloted by National Resistance Movement (NRM) government but conceptualised from the idea of working in collectives for community social-economic transformation.
Quoting the Fin Scope Survey Report of 2018, the biggest challenge for Uganda lies in accessing its largely rural population where 76% of adults live in rural areas compared to, for example, 66% in Tanzania. Given the high cost of providing financial services to rural areas, Financial Service Providers (FSPs) including banks lack an incentive to do so. This means that only 7% of rural Ugandans are ‘banked’ compared to 24% of those residing in urban areas.
Uganda government’s priority on promoting production and consumption of local products to improve domestic tax, efforts towards making the 65% Ugandan who are not yet in the cash economy appreciate their transition toward being bankable as well as triggered efforts by various Civil Society Organisations to spur Financial Literacy is a good move.
But according to me, the Parish Model approach to better household incomes across the country calls for a comprehensive study.
The writer, Alfred Kusiima is the Coordinator for Bunyoro Coalition on Oil and Sustainable Livelihood (BUCOSA)