Rural women in developing countries are at a serious disadvantage when trying to access credit. ORUDE, the Organization for Rural Development, is a grassroots NGO in south-eastern Uganda. Formed in 1997, the organization had been mobilizing and training rural women’s economic groups and preparing them to absorb credit. It then helped the groups to open savings accounts with microfinance institutions (MFIs) from which they hoped their members could access credit.

However, most MFIs view rural women as (ostensibly) a credit risk. When they manage to acquire loans, high interest rates averaging 10% per month are charged, depleting their savings. Yet a large percentage of the women’s loan portfolios consist of their savings, which accumulate no interest. Even when the women have paid off their loans the microfinance institutions do not pay interest on their savings, on the pretext that their savings were used as a loan security.

The women’s groups lacked the capacity to organize and form savings and credit cooperative schemes of their own from which they could borrow when in need and do away with the MFIs. Although there were savings and credit cooperatives – many of them enjoying support services from the government – they were male-dominated and women were not encouraged to join.

In December 2009, ORUDE began working with the support of the ILO to implement the model of SUSALECOs – Sub-County Savings and Lending Cooperatives. The project aimed at assisting 500 members from 20 women’s economic groups in the sub-counties of Mafubira and Busedhe to form savings and lending cooperatives, empowering them by enabling them access credit to finance small enterprises and other income-generating activities.

Under this scheme, women’s groups from each of the two sub-counties merged to form a sub-county savings and lending cooperative. In keeping with the cooperative principles, membership in the SUSALECOs did not exclude men, despite a special focus on women. The project’s total budget was just over $63,000 (ILO-COOPAfrica contributed $46,600 and the rest was raised locally). As well as helping the women set up SUSALECOs, the project also provided capacity building through education, leadership development and micro-enterprise training.

The project concluded at the end of 2010, by which time it had helped to create two legally recognized SUSALECOs, the Mafubira Rural Saving and Credit Cooperative (MARUSACO) and the Busedhe Rural Savings and Credit Cooperative (BURUSACO). The two cooperatives have a combined total membership of 493, of whom 380 are female and 113 male. Within just a year they had a loan portfolio of $31,109 and savings and shares amounting to $13,404. A total of 141 women had been able to access credit from their cooperative, amounting to $23,997.

For the first time in the history of the Mafubira and Busedhe communities women have been able to set up their own financial institutions to meet their financial and social needs. Women’s attitudes have changed from looking at subsistence agriculture as the only source of livelihood to becoming dynamic entrepreneurs, even if on a small scale. Slowly but surely, jobs are being created and livelihoods are improving. The growing cohesion among the members has encouraged the women to start demanding participation in the mainstream development agenda. Women now have the courage to contest for leadership positions locally and nationally. This courage can be attributed to the project that gave them the opportunity to discover their leadership potential.