Uganda Ministry Demands Shs11 Billion Recovery from Teachers' SACCOs, Cites Dormancy

The Ugandan government, through the Ministry of Trade, Industry, and Cooperatives, has placed a significant responsibility on the newly appointed Board of Directors for the Walimu Teachers’ Cooperative Savings and Credit Union. The board is tasked with recovering more than Shs11 billion in unreturned loans and revitalizing numerous inactive SACCOs across the nation.

The ministry previously invested Shs27 billion into these SACCOs to enhance teachers’ financial stability. However, a substantial portion of these funds, amounting to Shs11 billion, is currently tied up in bad loans given to teachers, significantly hindering the SACCOs’ ability to foster financial inclusion.

Officials have set a firm deadline of March 31, 2027, for the new board to recover at least 80 percent of the outstanding loan portfolio. This directive is a key component of a national strategy aimed at rebuilding confidence in the teachers’ cooperative movement, which has been adversely affected by economic challenges and governance issues.

During the board’s inauguration in Kampala, Robert Bariyo Barigye, Commissioner for Cooperatives Policy and Development, stressed the critical need for systemic reforms. He stated that the board’s mandate includes fortifying oversight mechanisms, improving governance practices, and ensuring the recovery of funds lost due to mismanagement of SACCO lending.

Barigye further revealed a concerning trend: 346 teachers’ SACCOs have ceased operations or become inactive, leaving only 39 out of 385 registered SACCOs functional. This situation serves as a stark warning, necessitating enhanced monitoring and stronger leadership within the cooperative sector.

Challenges such as weak management, political interference, and a poor repayment culture among members, often attributed to low salaries and economic difficulties, have historically plagued teachers’ SACCOs. The new board, led by Chairperson Steven Olinga, has pledged a dedicated effort to restore credibility, reactivate dormant SACCOs, and ensure public funds yield tangible benefits for teachers.

To curb future losses, General Manager Caroline Atai urged the board to implement modern tracking systems, digitize financial operations, and establish rigorous vetting processes for loan applicants. The ministry will evaluate the board’s success based on the amount of funds recovered, the number of SACCOs revived, and demonstrable improvements in financial services for teachers.

Source: Daily Monitor (Uganda)