The government of Uganda has disbursed Shs80.925 billion being payment of the Parish Revolving Funds to the first 3,237 compliant Parish Development Model (PDM) SACCOs in quarter one of the financial year 2022/23.
According to the ministry of finance, these funds are a capitalization grant to the PDM SACCOs for the sole purpose of lending to viable income-generating activities in the Production, Processing, Marketing and Storage of agricultural products (Pillar 1).
The state minister for finance planning and economic development, Henry Musasizi, speaking during the launch of the Disbursement of the Parish Revolving Funds (PRF), said that the objective of the Financial Inclusion (Pillar 3), for which the ministry is responsible under the PDM, is to sustainably transform subsistence households by easing access to appropriate financing.
To that note, the government earmarked Shs1.05 trillion this financial year as Revolving Funds to the PDM SACCOs.
“At the end of 5 years, the government shall have invested Shs5 trillion as capitalization into the parishes. If these funds are well managed and preserved by the PDM SACCOs, the PRF will become a major player in the financial sector in Uganda,” he added.
Musasizi confirms that members’ savings and the cumulative PDM SACCO funds will be substantial and sufficient to sustain the PRF going forward. He noted that the PDM SACCO mode of operation is different from the existing traditional SACCOs.
“This is because it is a centre for integrated service delivery at the Parish level for the benefit of the target beneficiaries as well as all other people in the parish,” he said.
According to the ministry of finance, the Parish Revolving Fund is being operationalized in different phases. These include Establishment Phase (FY 2021/22 – 2022/23), the Stabilization Phase (FY 2022/23 – 24/25), the Parish Based Management Information System and Acceleration Phase (FY 2025/26 – 2029/30).
Currently, the government is undertaking Establishment Phase (FY 2021/22 – 2022/23) phase. This involves the establishment of PDM structures (recruitment of Parish Chiefs, activation of Parish Development Committees, development and issuance of guidelines and policy framework, and ICT system design among others.
“In the end, we shall have the Acceleration Phase (FY 2025/26 – 2029/30). This phase shall involve consolidation and scaling up the successes registered in the earlier two phases to lay a firm foundation for a community-owned bank,” he noted.
The PDM SACCO is a multi-purpose primary cooperative set up to promote production; collective marketing; provide appropriate financial services (credit, savings mobilization, and insurance); and coordinate the provision of extension services to members.
In this way, the government has directly linked financial inclusion to production, which was identified as a big gap in the previous Government interventions.