Some years ago, the American financial sector was in serious trouble and it took the government’s bail out of most banks to avoid a complete financial meltdown.
Banks had been dishing out mortgages carelessly left, right and centre, without the certainty that their clients were able to pay. It led to one of the largest foreclosure crisis in the country.
About that same time, a section of one of Rwanda’s financial family was having similar experiences but it was not out of over confidence or carelessness; it was due to greed.
Many savings cooperatives (Saccos) had cropped up in every corner from nowhere. People had realized that pooling their resources together was the best idea to accumulating wealth. The managers of the Saccos had other ideas.
One by one the Saccos began to collapse because those in charge were busy helping themselves to depositors’ funds. Billions were lost in the process and depositors were left holding worthless shares in their hands.
The government did the same thing as the US authorities; it bailed out the Saccos, but on condition; they would have to undergo a major overhaul with stricter oversight.
Now barely have Saccos begun to get back on their feet than the old ghosts strike again. Embezzlement in Saccos is responsible for massive losses amounting to close to a Billion francs and it is the people entrusted in running them that are responsible. If they think that the government will bail them out this time, they have another think coming.
Rwanda Cooperative Agency, the body charged with overseeing and regulating cooperatives should no longer handle errant Sacco managers with kid gloves. They should come down hard on them to serve as an example for those who have made it a habit to reap where they have not sown.