Teachers Default on Shs6 Billion in Sacco Loans Across Busoga

Billions of shillings disbursed to teachers’ Savings and Credit Cooperatives (Saccos) in the Busoga region have gone unrecovered, totaling Shs6 billion. This figure represents a fraction of the Shs11 billion in outstanding loans owed by teachers’ Saccos nationwide, stemming from a Shs25 billion revolving fund initiated by President Museveni in 2015 to provide affordable credit to educators.

Walimu Cooperative Union, tasked with managing and distributing these funds, is now intensifying efforts to trace the money, reconcile Sacco accounts, and strengthen management systems. According to Mr. Charles Tenywa, national vice chairperson of Walimu Cooperative Union, the union is conducting meetings across regions to recover funds and revive struggling Saccos.

“We are holding different meetings aimed at loan recoveries, reconciling accounts and reviving Saccos, which are currently crippled,” Mr. Tenywa stated, emphasizing the goal of enabling more teachers to benefit from the program.

Weak management has been identified as a major challenge, with some Saccos failing to properly account for or manage the disbursed funds. Leaders of several Saccos in Busoga highlighted issues ranging from inadequate sensitization about loan terms to alleged misuse of funds by former management. For instance, the chairperson of Bulubandi Teachers Sacco in Iganga District reported that Shs40 million disbursed to their cooperative is unaccounted for, with former administrators withdrawing funds without proper documentation.

Ms. Resty Musubika, chairperson of Jinja Teachers Sacco, shared a similar experience, noting that her Sacco found records of a Shs350 million loan from Walimu, but the utilization and recipients remain unclear, allegedly by previous management. The Covid-19 pandemic further strained repayment capabilities as teachers faced income disruptions, prompting calls for reviewed penalties and interest rates.

In Mayuge District, Mr. Bashir Kayeyera, chairperson of Mayuge Teachers Sacco, pointed out that some teachers misunderstood the funds as grants rather than loans, contributing to repayment defaults. The union is urging for better loan recovery strategies and clear communication of loan terms to ensure the sustainability of the program.

Source: https://www.monitor.co.ug/uganda/news/national/teachers-default-on-shs6b-sacco-loans-5620098