Teachers have raised concerns about high interests rates charged by Umwalimu Saving and Credit Cooperative.
According to the teachers, the loan cost at the Umwalimu Sacco, especially the emergency loan is higher than interest rates charged by some commercial banks.
With the biting effects of coronavirus pandemic, some teachers in the private schools rely on financial support, mainly from the co-operative for survival.
However, the teachers blame the 15-year old cooperative for chocking them with the high-interest rate from their capital savings that they never get.
“The co-operative normally deducts 5 percent of our monthly salary as the membership capital savings, unlike other co-operatives where these savings would be later shared among the members, that is not the case within Umwalimu Sacco,” said Jean Damascene Turinimana, a teacher at Groupe scolaire Karama.
“Nevertheless, afterwards, if a member needs an emergency loan, s/he would have to weigh under the high-interest rate of 16 percent,” he added.
But when contacted, the Sacco said the interests are high because of risks involved since borrowers are not required to provide collaterals.
“It’s quick and very risky, no collateral requested prior to getting the loan only your identification card and you can get it within two minutes,” Laurance Uwambaje, the Director-General of Umwalimu Sacco.
According to Mr Uwambaje members have more options as they can benefit from three loans simultaneously mortgage loan, salary advance and emergency loan under the same savings’ cover.
“We always anticipate that once the person acquired that loans and fails to service them, the initial saving capital will cover the emergency loan, then salary advance and lastly the mortgage loan,” Mr Uwambaje added.
As the academic activities resumed after suspension on the back of the coronavirus related effects, the government was forced to recruit over 11, 000 teachers without proper due, and they are currently working under short time contracts.