New measures have been devised to trace the teachers who quit the teaching profession before they could complete repayment of loans they acquired from teachers’ savings and credit cooperative, Umwalimu-Sacco.

Speaking to The New Times on the eve of the World Teachers’ Day (which falls today), Laurence Uwambaje, the director-general of the cooperative, said the new measures come to boost ongoing efforts to recover loans that were extended to teachers who have since failed to honour repayment schedule.

Over 73,000 teachers in both public and private schools are members of Umwalimu Sacco.

Uwambaje said that this year alone – by August – loans amounting to Rwf49 billion had been given to teachers for different projects, especially in agriculture and construction sectors, while others took out personal loans.

She cited delays in repayment of loans totaling Rwf2 billion due to different reasons, including the fact that beneficiaries had since quit the profession and apparently decided to default on their loans.

The official said that at the end of last year the cooperative wrote off over 1Rwf1 billion in bad debt. 

"A big chunk of our financing goes to construction projects. It is a risky venture mainly because many of them (teachers) acquire mortgage for houses that do not generate income,” she said.

Some teachers also borrow from the cooperative to start income-generating projects which end up failing, Uwambabaje said.

"That often results into defaulting,” she said.

She said that after failing to repay the loan, some teachers decide to leave the profession, look for other jobs and change bank accounts, with some even leaving the country altogether.

"We have set up a team to work with other institutions with different databases such as Rwanda Social Security Board (RSSB), and the Ministry of Public Service and Labour to trace these people so that they can pay back the loans they took,” she said.

Training Sacco staff

In addition, Uwambaje said, Umwalimu-Sacco is training its staff to improve their capacity to tell which project proposals are viable and therefore deserve financing.

"They have to be accountable for the loans they issue,” she said, adding that the training also includes the aspect of helping loan applicants to improve their projects.

"It’s also our responsibility to support loan seekers to fine-tune their proposals to minimise risks.”

Loans will also be disbursed in installments to reduce the likelihood of beneficiaries diverting the money into other things, she added.

"Staff have the responsibility to follow up and evaluate each step of the project that’s being financed and release the money for each step after evaluating the previous one to ensure it is not diverted into unplanned activities,” she said.  

Uwambaje disclosed that next year the cooperative will launch a training programme for teachers in financial literacy so as to help deepen a savings culture among teachers.

Since 2006, Umwalimu-Sacco has disbursed over Rwf161 billion in loans, the official said. 

The teachers’ savings and credit cooperative was established by government as a vehicle to help improve the welfare of teachers across the country.

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