GULU Savings and Credit Co-operative Organisation may lose sh870.8m over unpaid loans and mismanagement. The defaulters are mainly government and security officials and the National Resistance Movement party supporters.
The defaulters are mainly government and security officials and the National Resistance Movement party supporters. Board chairman Tonny Kitara has asked the President to help recover the money.
â€œYour Excellency, in ordinary circumstances we should have instituted legal proceedings to recover said monies but our current financial state cannot make it possible for us to engage a lawyer,â€ said Kitara in a letter of April 21.
â€œGiven the complexity and status of these people, we find your office the only logical option left.â€
Richard Todwong, the special presidential adviser in the north, acknowledged receipt of the letter. His office, he explained, had registered several complaints about SACCOs which would be investigated.
The co-operative, Kitara said, had recovered only sh10m from â€œordinary defaultersâ€ by attaching their property. â€œFor the NRM cadres, when we try to attach their property, the Police block us.â€
Manager Pamela Adyang said the management had written to the defaulters about the loans but they had not replied. â€œWe run their names on local radio stations and none of them responded.â€
Documents showed that the NRM cadres and security operatives owe more than sh79m.
According to the cooperativeâ€™s manual, any member who defaults is liable to pay a penalty. A defaulter has two daysâ€™ grace period, after which a penalty of sh1,000 per day for the first seven days is levied. If one still fails to pay up, the penalty goes to sh2,000 per day until full payment is done.
Given the failure to pay back the loans, Kitara said, the co-operative had failed to pay its clients. Consenquently, some Pader and Pabbo members have sued the management for â€œlack of money in their accounts.â€
A total of 64 members want payment of sh49m. â€œMy pass-book indicates that I had about sh4m but when I went to withdraw the money, I got nothing,â€ said Patrick Ongom.
When he visited Gulu in 2005, the President advised the business community to form SACCOs and promised to supplement their savings to enable them borrow at low interest rates.
Subsequently, Gulu SACCO was formed and in January 2006, it obtained a sh50m loan from the Micro Finance Support Centre on the Presidentâ€™s directive.
The SACCO has 1,737 members paying a membership fee of sh20,000.
However, most members, especially those from the Government and security circles, have re-paid half or absconded.
â€œSome NRM mobilisers have refused to pay, saying itâ€™s their reward for mobilising support for you and the party,â€ Kitara said in a letter to the President.
NRM mobilisers who absconded payment include Aywee Kwe Women Group sh8.7m, Mii Tam Women Group sh3.79m, Lok Tel Women Group sh8.72m and Otira Traders Group sh8.57m.
However, Francis Mawa said Kitara was using this to coverup the money he mismanaged and cannot account for. Mawa and other board members resigned last March protesting what they called mismanagement by Kitara.
NRM cadres fail micro-finance