How TRUST BANK empowered tea farmers in Tanzania
07-12-2023Written by Ibrahimu Harry Mwankanye, Cooperative advisor Tanzania
RSTGA SACCO was established in 2008, thanks to the efforts of Rungwe Smallholders Tea Development Trust Fund that operates under the Association. This is the agent for the development of tea growing in the region. Before the SACCO was formalised, the development trust fund facilitated farmers in establishing savings and credit groups. After having facilitated these groups for 3 years, several farmers reached the stage that required a more professional organisation to serve the financial needs of tea growers in Rungwe. Currently RSTGA SACCO has 2,133 members.
Financial services impact
RSTGA SACCO is providing savings and credit services to its members. Savings services are mostly used by members to be able to comply with the conditions for getting a loan. Most loans are agricultural production loans, mostly related to farmer inputs e.g., seeds and fertilizer and occasionally working capital.
Targets set by RSTGA SACCO when it was formalised in 2008 were very ambitious. The aim was to reach 15,000 farmers within 5 years and have 8 branches all over Rungwe. Now, after 15 years, this target appears to be too ambitious and the expectations have tampered despite the serious growth up to 10,000 smallholders tea farmers they reached, including members & non- members of the SACCO.
The demand for loans is currently higher than what the SACCO can offer. The loan size does not allow for bigger investments. With the SACCOs growth ambitions the demand for credit will even increase. RSTGA SACCO seeks to expand its outreach to members and wants to provide them with more savings and credit services.
RSTGA SACCO's journey towards expansion
In 2015, RSTGA SACCO managed to agree with the tea farmers association (RSTGA) and with the Tea processing company (WATCO). The aim was to encourage all RSTGA tea growers to become members of the SACCO, facilitating direct payments from WATCO to the SACCO accounts for the tea transactions. To enable such a growth in members and transactions, RSTGA SACCO is professionalising its operations: linking all 5 branches to the head office in Tukuyu, acquiring new accounting software and training staff and board. The path towards growth is now clear and concrete steps in the right direction have been taken.
Further professionalisation of the SACCO was achieved in 2016 by officialising the strategic collaboration between RSTGA and WATCO. The managerial proficiency improved (at HO and branches) with regard to the accounting software and the linking of the branches was finalised in 2016 and all the data was transferred to the new system.
In 2017, more efforts were put into a governance training for the newly established branch committee, a training for branch managers on KPI's, formulating an internal audit plan and also into developing a clear succession HR plan for SACCO leaders and management as well as a delegation plan.
In 2018, all RSTGA SACCOs staff members were fully familiar with the new accounting software (TRUST BANK) for recording transactions and producing reports (monthly, quarterly & yearly) for board members & management team.
From 2018 till now, all staff & board members are fully familiar with accounting software. Payments for the supplied green tea leaves to the tea processing factory are paid into individual farmers SACCOs accounts (70%) through SACCOs branches.
