By Our Reporters
Shocking corruption scandals at the Uganda Microfinance Support Center (MSC) have prompted line Minister Matia Kasaijja to intervene. Reliable sources indicate that Kasaija intervened after Microfinance Minister Haruna Kasolo was rejected as not good and helpful enough by stakeholders who perceived him to be part of the problem at the Center whose annual budget stands at Shs80bn. Intelligence reports indicate that, whereas the entity was created to support poor Ugandans access cheap credit through their SACCOs & Cooperatives, the John Peter Mujuni-led management has taken advantage of Kasolo’s ineptness and have subverted that process. Rogue elements within the MSC now lend the rich in a very complicated syndicate that has left Kasaija shocked to the marrow. Here is how it happens; the MSC cash is advantageous in a way that whereas commercial banks and other non-state lenders charge as high as between 22% and 36%, the MSC money is lent out at just 13% interest. This is so because Museveni wanted to use the MSC intervention to support the very poor people mostly farmer groups (SACCOS) that can’t afford expensive credit from banks and money lenders who charge 22-36% interest. Shrewd managers at MSC these days act smartly by passing on some good billions to private money lenders who give it out to rich speculative tycoons at 22-36% where government expects it to be lent out at just 13%. On being repaid back at the interest of 22-36%, the difference (enjawulo) is shared between MSC officials and their proxies running the private money lending businesses. This has distorted the president’s objective as the genuinely poor members of the Cooperatives and SACCOs for whom MSC was created are made to wait as the government money is being speculated upon through money lenders (it’s called okwozamu sente/washing the money).
Even in rare cases where money is channeled through the Cooperatives, it’s just for conduit purposes because intelligence investigation has indicated to Kasaijja that the money eventually goes to wealthy city tycoons and not the poor whom it’s intended to empower. Sometimes the MSC rogue elements advise the rich to speculatively join the SACCOs or Cooperatives and eventually be aided to access and monopolize the money that will continue to theoretically be indicated in the MSC records to have been disbursed to a Cooperative. Sometimes the poorer members of such a cooperative or SACCO are bribed (with MSC approval) to acquiesce to such very exploitative arrangement favoring the rich who pretends to be a member of the same SACCO or Cooperative. “This is what happens; someone goes to a commercial bank and borrows say Shs6bn to erect a commercial plaza and when he or she gets stuck because of the very high interest, they speculatively run to MSC and be lent the tax payers’ money meant for the poor at the 13% interest rate and quickly clears off the commercial bank or more expensive money lenders. Sometimes such arcade tycoons directly go to MSC and be accessed poor borrowers’ money through proxy money lenders. This seems okay but it’s distortional because the MSC funds are meant for the poor borrowers and not rich speculators in Kikuubo and other parts downtown,” furiously said a source close to Kasaija.
MSC BOARD RESIGNING;
We are further informed and reliably so that on appearing powerless to stop this kind of fraud, in case the IGG, MPs or even Auditor General exposes it someday, some board members recently approached Matia Kasaija and reported their predicament. Mind you this is a new board that replaced the one headed by Justine Bagyenda in March 2018. “The members don’t want to soil their names and since they realized it wasn’t going to be easy to stop the rot at MSC, they offered to resign to allow Hon. Kasaija appoint a new Board,” narrated a source in Kasaija’s office.
“They told him they are uncomfortable working with their line minister Haruna Kasolo who doesn’t seem to realize there is a problem at MSC. Hon. Kasaija pleaded with them not to resign because it would embarrassingly make government look bad and powerless in the war against corruption. He assured them he will be sidelining Kasolo since he is complacent and be involving himself more in supervising work at MSC.” The finance ministry source adds that Kasaija even put his promises to the board in writing and assured them he would give them all the political support they require to crack the whip on officials confirmed to be involved in corruption dealings so that board members aren’t humiliated by members of the powerful mafia clique at MSC. Subsequently, a retreat meeting between the board and top MSC management has been organized by Kasaija over the weekend. It will be held in a Bugoloobi Suite for 4 days and Kasaija will ensure consensus is built there. After this retreat some changes could be effected in the way MSC transacts business and Kasaija has in writing offered to extend his full political support to the changes the new Board members will be insisting upon. The new board members in office since March include Wilberforce Mugerwa the chairman, Mayanja Gonzaga (Local Government), Ruth Musoke Biyinzika (Private Sector Foundation Uganda), Juma Walusimbi and Robert Bariyo Barigye (the Cooperatives Commissioner Ministry of Trade). This isn’t the first time the MSC is being cited in controversial dealings because even the former Board Chair Specioza Kazibwe’s removal was a few years ago mired in controversies after Parliament and OAG unearthed shady dealings at the Kololo-based entity. Ruth Nankabirwa was indicted for not doing enough to contain the situation when she was occupying the ministerial office currently being held by Haruna Kasolo. For comments, call, text or whatsapp us on 0703164755.
