Home NewsNational Over 200 SACCO Officials Under Probe Over Mismanagement of Funds

Over 200 SACCO Officials Under Probe Over Mismanagement of Funds

10:06 pm

Launch of Umurenge Sacco in Byimana sector- Ruhango district. More than 200 managers under probe over mismanagement of funds.

Rwanda Cooperative Agency (RCA) has submitted names of over 200 managers of Savings Cooperatives commonly known as Saccos to be investigated for allegedly mismanaging of funds meant to improve lifestyle of farmers.

According to Jean Bosco Harelimana – RCA Director General, the list of suspects represents at least 6%-7% of the 3000 Saccos staff that will face Rwanda investigation bureau (RIB) for further investigation on embezzlement.

There are 416 Saccos across the country with transaction capital worth over Rwf70 billion with a grown clientele of 3.3 million customers.

This investigation also comes at a time when despite increased access to financial services in rural Rwanda, as a result of establishing Saccos countrywide, the institution has registered a Rwf1.7billion in non-performing loans (16.3%) – which the central bank audit says is beyond the required 5%.

“Some of this money was handed out in illicit processea, negligence done by the staff and we have handed the report to RIB for investigation” said Harelimana in an interview with KTPress.

So far 20% of the non-performing loans (NPL) have been recovered but according to RCA Director General, this mismanagement was caused by a large turnover in the Saccos staff, and lack of proper technology to digitalize the Sacco systems.

“The NPL’s are as a result of delays in repayment of loans handed to citizens, but we also think that use of technology will minimize tampering with loan files and operations” said Anastase Kalimunda, the Manager of Sacco Inganzo Ntarabana in Rulindo district, Northern Province.

While many Sacco managers think the use of digital technology will reduce attempts to misuse citizen’s savings, the Central Bank and RCA still have to wait for another two years to have the technology up and running in all 416 branches after the Kenyan tech company (Fintech) failed to kick-start the software installation.

Rwanda has decided to customise the process by hiring local individuals to work on the software dubbed ‘MyForce’ – with the first Sacco’s yet to get connected in the next eight months, according to Harelimana.

Central Bank Director of Microfinance Supervision, Kevin Kavugizo, however said that ahead of this, all Sacco’s chairman’s of board of governors should re-do an internal audit of all loan paperwork and review the staff recruitment which has been tainted by unqualified Sacco’s staff.

In May this year, Parliament amended a law on corruption – making the crime punishable with more than 5 years in jail and convicted persons will have to pay back two to three fold of what they embezzled.