The management of Walimu Cooperative Union Ltd says it is owed Shs11 billion in outstanding bad debts by teacher cooperatives.
Walimu Cooperative Union is a secondary cooperative with 275 members who borrow for onward lending. It manages a Shs25 billion grant pledged by President Yoweri Museveni in 2011 to teachers’ SACCOs to cushion government teachers against low wages.
Speaking to journalists at the Union offices in Kiwatule on September 26, Finance and Administration Manager Robert Omongin Odeke said the money is held by primary cooperatives.
‘Teacher cooperatives have this money with them,’ he said.
‘Last year in June when they were inaugurating the new board, the Registrar of Cooperative Societies tasked the new board to recover this 11 billion shillings,’ he added.
Omongin said the debts stem from member defaults, many of them trade union leaders in districts and regions, not poor accountability or corruption.
He said recovery efforts have yielded minimal results, with only Shs2 billion recovered through courts.
‘Mediation was carried out or arbitration where the registrar of cooperative societies was the chair of the arbitration committee. Another second round of arbitration was done where even the leadership of the trade union were involved did not yield much. We went to courts of law to recover the money and we recovered some,’ he said.
He said conflicts arising from recovery efforts are not criminal in nature.
‘But we would like to remind our members and the whole country that in cooperatives, any conflict that arises is not criminal because we give money to a member because we deal with a member,’ he said.
Omongin explained the recovery procedure: management first, then the board, then the annual general meeting, then the Registrar of Cooperative Societies through arbitration, and finally courts of law.
On how the debts accumulated, he said some SACCOs issued post-dated cheques which bounced after teachers took multiple loans from other financial institutions.
‘Now, later on when we wanted to recover the money using the code system where you go back to the source, to the employer, we found that most of our members, the teachers, had got money from other banks, commercial banks,’ he said.
Because deductions are capped, the Union could only recover Shs10,000 to Shs20,000 monthly from over-indebted teachers, prolonging repayment.
‘Now when we code, and you have a loan of 80 million, you have a loan of 60 million, 10 million, and because you have put a system of recovery, we are covering 10,000, 15,000, 20,000, how long will you take to pay this amount?’ he asked.
New board chairperson Stephen Olinga said the Union has introduced digital systems to improve transparency and ease access.
‘We have introduced systems in place that even enable the teacher to get the money in class, at school, at ease, without disturbing the teacher moving up and down looking for the loan facility,’ he said.
‘We have also innovated a system of digitalized recovery processes. The teacher will not again be running up and down. We shall use his salary, look at the affordability of his teacher,’ he added.
The Union lends wholesale to teacher SACCOs at 8% per annum, and directly to teachers at 15% per annum on reducing balance.