By Mabinty M. Kamara
The weak status of cooperative societies is a contributing factor to slow pace of development in developing countries like Sierra Leone, experts in the sector have said.
They said in Sierra Leone, at the heart of the problem is the increasing display of neglect of the sector as illustrated by the lack of a cooperative bank over the last 10 years.
Cooperatives are associations comprising members with interest in a particular enterprise, either as producers, sellers, or consumers. Up to the early 2000s, prior to the closure of the National Cooperative Development Bank of Sierra Leone in 2006, the sector was vibrant in the country.
Newton Marlin, Registrar of the Sierra Leone Cooperative Department in the Ministry of Trade said the lack of a corporative bank in the country has posed a major challenge to the work of the department, to the advantage of the commercial banking sector. He said some cooperative societies in the country generate profits in billions of Leones and that most of this money finds its way into commercial banks.
Marlin said if there was a cooperative bank, the turnover from these societies could be used to operate other cooperative institutions like the fishing, agriculture, and mining sectors.
Marlin was speaking in the context of the commemoration of the World Council of Credit Union Day in October.
“We strongly believe that cooperative is the missing link for the slow growth of certain countries like ours,” he told Politico in an interview, noting that in developed countries where cooperatives are “very strong”, the synergy between cooperatives and development is visible.
“When you come to Africa where the cooperatives are almost dead or are still struggling, you can see that in the trend in development. That’s why we are calling for the National Cooperative Development Bank to come to life,” he stressed.
Cooperative societies in Sierra Leone are guided by an apex body called the National Association of Cooperative Credit Unions Sierra Leone (NACCUA), which has 32 registered member organizations.
NACCUA and the Cooperative Department are both supervised by the Ministry of Trade and Industry.
Experts in the sector say a lack of a savings culture is also holding back progress in its development. There is also a major concern over loan delinquency.
At the annual celebration of the World Council of Credit Union Day, which is held every 3rd Thursday in October, General Manager of the Irish League Credit Union (ILCUs) Ltd, Solomon Mwongyere, revealed that they have a total loan portfolio of Le6.7 billion, for a savings portfolio of Le5.7 billion.
ILCU comprises 28 credit unions, with a total membership of 9, 264, of which 62% are females.
“The loan delinquency is going up and as a department that is supervising and auditing these credit unions, we are not happy about this as both members and a handful of boards who should be overseeing these credit unions are part of the problem,” said Marlin.
He warned that the department is considering taking punitive measures next year, as prescribed in the cooperative Act of 1977 next.
© 2019 Politico Online
