Umwalimu Sacco, a teacher’s savings and credit cooperative expects to disburse about Rwf 30 billion in loans to members by the end of this year—the largest annual disbursement so far by the cooperative since inception in 2008. The Sunday Times’ Susan Babijja spoke to the managing director of one of the country’s largest cooperative, Joseph Museruka.
What is Umwalimu Sacco and who is eligible to be a member?
Umwalimu Sacco is a savings and credit cooperative for teachers and its mandate is to empower members by uplifting their socio- economic welfare, and in the process, contribute to the economic development of the communities they live in.
Primarily, it is teachers working under the Ministry of Education who are eligible to be members, but teachers in private schools can join as long as they are ready to cooperate and fulfill there obligations as members.
Umwalimu Sacco is the brain-child of the President of Republic, H.E Paul Kagame. His main concern was the financial situation of teachers that did not fully enable them to cater for their needs and the welfare of their families. Umwalimu Sacco was registered by the Ministry of Commerce and Trade in 2006 and licensed to operate as a cooperative by theNational Bank of Rwanda in 2008.
Members must pay membership fees and a share contribution of Rwf 10,000. The teachers should also be in position to save 5% of their net monthly salary. A member becomes eligible for a loan only after saving for at least six months.
Apart from eligibility to borrow, what other benefits do members get from the Sacco? Why would a teacher who is not yet a member join?
Usually, members get mortgage loans. There are 2,400 teachers who have already secured mortgage loans from Umwalimu Sacco and have constructed houses for themselves. Others got financial loans because we always encourage them to start income generating businesses to boost their incomes.
We encourage teachers who have not yet joined to do so because they are missing out on such benefits like low interest mortgage loans.
What is Umwalimu Sacco worth at the moment in terms of assets i.e. the balance sheet, loan book and physical assets.
The loan book has grown from Rwf 2 billion in 2009 to the current Rwf 54 billion. That shows that there is a big growth in the business. The Sacco expects approximately Rwf 4 billion as interests from loans disbursed to members.
Where is the evidence to show that Umwalimu Sacco has helped change the life of a Rwandan teacher?
The evidence is with the big number of members who have started income generating activities and those who have constructed houses that they did not have before they joined the cooperative.
We believe that this is a very important achievement. We want every teacher to have an income generating activity or project and this is the very reason why the President started this cooperative.
Apart from lending to members, in which other ventures is Umwalimu sacco investing its resources?
As a cooperative, we are not investing in anything else. Our primary concern is to help teachers get to another level by improving the conditions they live in and to diversify their sources of income.
You have been in business for many years and still want tax exemption/waiver. Why don’t you want to pay taxes yet you are making such huge profits in form of interest on loans?
We still need tax exemption even though we have been in business for a long time because the law gives us that opportunity. The most important thing here is that we have fulfilled the requirements for the tax exemptions as stipulated in the law. We are now working on the legal requirement of channelling at least 15 per cent of our loans into agriculture sector to fulfil all the conditions for tax exemption.
Where do you envisage Umwalimu Sacco to be in the next five years in terms of size of membership?
Our future plan is to see all the 51,000 teachers working under the Ministry of Education become members. Currently only 44,000 teachers are under the Sacco. We also want to give teachers loans to acquire laptops and we have already started to ensure that they easily get internet access.