Two top managers of Rwanda teachers’ savings and credit co-operative (Umwalimu Sacco) have been suspended, a move that has affected the smooth running of the Sacco.
Joseph Museruka, the managing director and Jean Marie Vianney Nzagahimana, chairman of the board of directors were suspended on December 11.
The exact cause and the duration of the suspension were not clear, but sources said that the National Bank of Rwanda (BNR) which suspended the officials has since started a thorough audit of the co-operative society.
When contacted the central bank said it could not comment on an issue which is currently under investigation.
But the current Sacco management headed by Josette Umuraza, the deputy chairperson of the board confirmed the information.
“Their suspension doesn’t mean we have a financial crisis. BNR’s auditor is generally looking into the governance aspect of the cooperative, it’s what is indicated in the terms of reference he presented to us,” Ms Umuraza said.
The issue of the affected officials was highlighted at last week’s general assembly of the 80,000 member financial institution, with many indicating that it is derailing the smooth running of some of its plans.
Officials of the Rwanda Co-operative Agency and BNR, the two institutions mandated to regulate the Umwalimu Sacco, could not comment on the matter. The development comes at a time when the teachers’ Sacco was just recovering from the dilemma it found itself in shortly after its creation in 2008.
The growing rate of non-performing loans, coupled with the huge debt recovery cost made it incur losses in multi-million Rwandan francs.
Last year, the seven-year-old financial institution had not yet recovered over Rwf700 million from loan defaulters, mainly former teachers who quit the profession without repaying their loans.
While the suspension of the top management officials paints a negative picture likely to cause concern, Ms Umuraza argued that the Sacco is financially stable, having made Rwf1 billion profit in the past six years.
“We have posted a remarkable growth because we posted Rwf400 million loss in 2009, but as we speak the Sacco has made more than Rwf1 billion in profit. That is a good step,” she said.
Meanwhile, the fate of the two suspended officials remains unclear and this, according to the members, is holding back key plans. One of them was deciding members’ capital share increment from the current Rwf10,000 to Rwf40,000 to pave the way for the construction of an ultra modern office for the co-operative, according to the management.