Treasury owes SACCO k200m, cripples operations
Treasury owes a 10 000-member United Civil Servants Savings and Credit Cooperative (UCS Sacco) about K200 million, a situation that is crippling operations of the country’s largest Sacco.
UCS Sacco president Fletcher Mhango told a news conference in Karonga on Thursday at a function to merge Tikwere Community Sacco and UCS Sacco that the money is for the months of May and June 2016.
UCS Sacco majority members are teachers from its nine branches in the Central and Northern regions with assets of over K1 billion and a loan portfolio of K550 million, according to the Sacco’s records.
But Treasury spokesperson Nations Msowoya said in an interview on Saturday the delay to remit the money to UCS Sacco is largely not from government’s side, but from the Saccos.
He said: “It is true that there is this challenge, but largely it is because we do not get clear and coordinated information from the Saccos.
“The money is there as long as the Sacco member is a civil servant. The only hiccup we are facing is logistical complications. They should tell their members and their secretariat to give Treasury the right information and details.”
Msowoya said most anomalies take about two to three months to be cleared, despite holding discussions.
But Mhango said Treasury’s delay to remit the deductions is retarding the growth of the Sacco.
“Government is a big rock to push. Although our mother body Malawi Union of Savings and Credit Cooperatives [Muscco] normally engages them to speed up the process, it is not working,” he said.
Mhango said as a result, some low-income earning teachers fail to access loans that come with five percent interest rate and other benefits that the Sacco offers to its members.
He said to worsen matters, the teachers cannot access commercial bank loans because of their status in society.
Muscco chief executive officer Sylvester Kadzola, in a separate interview on Saturday, said the delay affects the civil servants negatively because most of them cannot access loans from commercial banks, whose interest rates hover around 40 percent.
“It is hard for civil servants to access loans from commercial banks and they mainly depend on Saccos to help them to make ends meet,” he said.
Cases of government delaying to remit money to Saccos are not new.
In 2013, government owed teachers K1.6 billion deducted from their salaries which affected teachers who wanted to access loans from their Saccos.
The remittances were settled after Teachers Union of Malawi (TUM) threatened to stage a strike.
