Kampala traders set up pension fund
March 6–The Kampala City Traders Association (KACITA) Provident Fund, ‘Tegeka (prepare)’ , a private pension scheme for members and those involved in the informal sector, but with an interest to joining KACITA, has come into being.
Everest Kayongo, the KACITA Chairman said, “Unlike those in formal employment, those in informal employment have not had a pension scheme, where they can deposit their savings for future use.”
“They would previously opt for other options such as expanding their business or constructing rental housing and those who were not in position to do so, would have nothing to fall back on once they stopped active trading,” Kayongo said.
He said introduction of the fund will give these people an opportunity to save some money which can help them in their later years.“Our target is to tap into the over 200,000 member catchment area of traders and those in small and medium size employment in Uganda for the start,” he said.
Contributions will be on a voluntary basis with a minimum of UGX 3,000 (about 80 US cents) and interested parties can save whenever they can for a period of up to 10 years.
The Fund is licensed by the Uganda Retirement Benefits Regulatory Authority Act, under the administration of the ICEA (Uganda) Limited. The account will be held in Housing Finance Limited and will be managed by Stanlib Uganda Limited who will report back to the trustees on how the fund is performing on a monthly basis.
“This is a very good opportunity for those in informal sector, because there are people who have been in employment for more than 10 years, but have nothing to show for it. But now there’s an opportunity to save,” said Amina Hersi Moghe, the proprietor of Oasis Mall, one of the city’s most prominent shopping centres.
Gudula Naiga Basaza, the Chairperson of the fund said members who may wish to construct their homes will have an opportunity to use their savings as a guarantee to secure a loan from a financial institution.
Hersi said the scheme will help change people’s attitudes towards saving, “Once you have saved that money, you cannot easily spend it the way you want unless your savings attain a maturity period of 10 years or when in conditions of ill health or disability,” she said.
Those still under 18 years, but who wish to contribute can do so through supplementary accounts run by their guardians under the rules and conditions of the scheme. Anybody interested will have to register and enroll as members of the scheme.