The Teacher’s Savings and Credit cooperative, commonly known as Umwalimu SACCO has said it will enter into amicable negotiations on loan financing with private school teachers who have had issues with financing their loans due to COVID-19.
The decision comes after several private school teachers have raised complaints over their respective Saccos deducting their salaries to finance loans that were taken before the COVID-19 pandemic which resulted into many schools closing in May 2020.
After spending close to nine months with no direct classroom teaching and not receiving monthly salaries, until November 2020 when schools resumed activities again, private school teachers say Saccos have continued to deduct their salaries to finance loans.
The affected teachers say that they have approached their saccos over these concerns to have the cooperative extend the loan period or resume the loan financing in months following November 2020, but in vain.
When schools resumed they (saccos) continued deducting loan interest fees and delay penalties on the loans,” one teacher David Mugabo said.
“We approached the Saccos and they advised us to halt the loans but in vain instead asked us to take another loan to cover the previous one”.
Even with this financial option of applying for an additional loan top up, being possible, the teachers say that the option should be for teacher’s SACCOs to reprogram the loans management system.
Teachers who spoke to the national broadcaster said they asked their SACCOs to backdate the system by adding more months of loan repayment so that they can repay effectively from when they resumed working.
They were told that it is a system that cannot be changed.
“A system is built by humans and for servicing needs of human being, what is so hard in reversing the system so that we can be able to work with financial institutions,” one teacher JMV Karangwa said.
The concerned teachers say this financial deadlock is affecting their wellbeing and need Saccos to reconsider the loans schemes, an issue that was backed by the teachers labor syndicate (SYPERWA).
Sylvestre Vuguziga, the Syperwa chairperson said that in such a difficult COVID-19 situation, Saccos need to take unprecedented action and act flexibly in taking measures that are unusual.
“Legally you cannot deduct one’s salary for not being able to finance loans when there are sound reasons, like COVID-19. We need unusual interventions in these unusual times of the pandemic,” Vuguziga told the national broadcaster last week.
In response, Laurence Uwambaje, the Director General of Umwalimu Sacco said that they are looking into the matter to have an amicable understanding between all parties, but also with an alternative of seeking funding from the Rwf100billion Economic Recovery Funds or partners to cushion the financial gaps caused by COVID-19.
Since the establishment of Umwalimu Sacco in 2008, there are over 78,000 members from public and private schools and 1200 private school teachers who had picked up loans worth Rwf1.3billion.
Figures from the National Institute of Statistics of Rwanda (NISR) assessing the impact of COIVD-19, show that the education sector continues to be the most affected dropping by 57%, Hotels and restaurants dropped by 55%, Transport dropped by 33%. However, Information and communication sector grew by 43%.