- The ministry’s assistant director of human resources, Gisela Mugumira, said this on behalf of permanent secretary Dotto James during Hazina Saccos’ annual meeting.
Dar es Salaam. The ministry of Finance and Planning said yesterday that in order to ease the burden of Higher Learning Students Loan Board (HLSLB) debt on its workers, Hazina Savings and Credit Cooperative Society (Saccos) Ltd is planning to take over the loans to be paid at a more conducive setting.
The ministry’s assistant director of human resources, Gisela Mugumira, said this on behalf of permanent secretary Dotto James during Hazina Saccos’ annual meeting.
Speaking during the official opening of the meeting, she said the members of the Hazina Saccos had requested Saccos to take over their loans by paying the whole fee.
“When the loan is taken over, the Saccos will enter into a contract with the employees to pay at an affordable interest rate for an agreed period,” she said
She noted that the decision is among issues that are being recommended to create a conducive environment that will encourage more employees to join Saccos which currently has only 4,500 members countrywide.
The other thing, she said, is putting up affordable loan interest rates which have been reduced from 2 percent monthly to 1 percent.
Explaining, she said there are two types of interest rates including development and standing order, which is risky.
“For loans that are paid by the employee’s salary for the purpose of business, paying school fees among others, we used to charge an interest rate of 15 percent annually or 1.25 percent monthly on reducing rates,” she said.
According to her, the interest rate has been reduced to 13 percent annually and 1 per cent monthly on reducing rate.
However, she noted that under the standing order, interest rates for risky loans that the employee enters into an agreement with a bank to pay every month have decreased from 24 percent to 18 percent annually while 2 percent to 1.5 percent monthly at a reducing rate.
Meanwhile, the chairman of the Saccos, Haliki Mwaiteleka, said they [Saccos] have a capital base of Sh12 billion.
He, however, noted that while until September they had issued loans amounting to Sh4.33 billion, they face challenges with some of the loans issued through standing order arrangement because the debtors were not trustworthy.
“We have gone through and discovered that at least 13 1 million has not been paid since Janury to October 2020 denying Saccos the amount,” he said.