Teachers have been advised to seek loans to start income-generating activities instead of constructing houses.

The advice was given by Joseph Museruka, the managing director of the teachers’ savings and credit cooperative (Umwalimu Sacco) during their annual general assembly in Kigali yesterday.

"Many teachers are interested in mortgage loans instead of business loans yet such loans are only helpful if you have other sources of revenue,” he said.

Museruka called upon teachers to use loans for the purpose requested for to ensure their welfare and development.

He said only 18, 000 teachers out of the over 51, 000 members of the cooperatives have business loans, a number he said was low.

"There are even those who secure business loans but use the money for other purposes,” Museruka said, adding that many of them use the loan to cater for subsistence needs like paying school fees, which leads to defaulting.

Jean Marie Vianney Nzagahimana, the chairman of the board of directors of the Sacco, advised teachers to avoid relying on overdrafts.

"Teachers always rely on overdrafts and emergency loans to satisfy immediate home needs, but one cannot develop with such practices,” he said.

The cooperative gives teachers loans at an interest rate of 14 per cent as opposed to 19 per cent on average in other financial institutions.

Jean Baptiste Migisha, a teacher at Groupe Scolaire Bugomba in Gicumbi District, said it is better to secure a business loan but argued that mortgage is more useful as it saves one from renting.

He said: "It is good to apply for business loans but if you operate your business from rented premises, the profits will go to the landlord.”

For Juvens Kataryeba, a teacher at Groupe Scolaire Rukizi also in Gicumbi, teachers should think of family planning since unplanned families compel many to depend on overdrafts which hinder their chances of applying for business loans.

"The bigger the family, the more responsibilities you have, including schools fees for children and other expenses,” he said.

We should sensitise our colleagues, especially youth, to embrace family planning so that they can develop, Kataryeba added.

Currently, Umwalimu Sacco has disbursed over Rwf30 billion in mortgage loans.

The recent impact assessment conducted by Umwalimu Sacco shows that 80 per cent of the loans are performing well, eight per cent stop paying back their loans at the beginning while 12 per cent did not start paying back because the loans were used for purposes they were not requested for.

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