Government on Monday, August 1 announced that it would allocate Rwf5 billion towards the recapitalisation of Umwarimu Sacco, in  a bid to improve the welfare of teachers including access to finance through the body.

Umwalimu Sacco is a saving and credit cooperative for teachers in the country and the announcement to boost it was made by the Prime Minister while appearing before parliament.

The money injected into the teacher’s coop comes at a time when the government has also announced that teachers would get up to 88 percent salary increase.

This, according to Laurance Uwimbabaje, the Director General of Umwalimu SACCO, will not only increase more than double the amount of loans teachers have seriously been getting, but also the uptake.

Previously, Uwambaje told The New Times in an exclusive interview that, much as there were funds for teachers (teachers in public schools) to access loans, there was reluctance due to limited capacity to pay back.

She also pointed out that the institution would in some cases refuse to offer loans to some applicants after analyzing their capacity to reimburse the money, which she said was at times a difficult decision.

"But with the recapitalisation and salary increase, there is hope to meet the eligibility criteria for almost all teachers.”

Uwambaje shared an example trying to compare what the situation was like before and after the new incentives.

For instance, she said, a teacher who earned a salary of Rwf57,000, was eligible for a mortgage loan of up to Rwf2.3 million at an interest of 11 percent within 12 years.

This, she added, is set to increase to Rwf4.5 million at the same interest within the same period of time.

According to her, uptake of mortgage loans ranks the highest followed by personal loans including the overdraft and emergency loans. As of end June, Umwalimu Sacco recorded a total of Rwf93 billion in outstanding loans up from Rwf78 billion before the pandemic outbreak.

"This indicates that loans are still a necessity for teachers, especially public teachers,” she added.

Beneficiaries react

It has previously been a challenge for Christine Umutesi, a primary school head teacher based in Muhanga, as well as her colleagues to get a sizable loan from the teachers coop due to low salaries.

This, she said, has often disentivised any form of loan, an experience that most teachers share.

"A primary school teacher could not even borrow money that can facilitate them to buy a motorcycle to use in their day to day lives.”

However, she added, "It is now possible that they would buy it (moto) and also live in a comfortable home.”

Umutesi also stressed that it was nearly impossible for an A2 certificate holder to be able to pay for further education or even pay for rent.

"A lot is going to change but the most important thing is for a teacher to work without having any other problems that can potentially distract them from work.”

Umutesi shared similar sentiments with Esperence Nzamurera, the Groupe Scolaire Burema, Head Teacher, who said the development will help them cope with the current high cost of living.

"Everything on the market has literally shot up. There is no exception. Rent is up, school fees for children, food prices, everything.”

She said that the move will thus enable teachers to acquire loans to be able to cope up.