The money will be deducted from members’ salaries effective January.
Teachers in Rwanda have started contributing towards the construction of a head office block for their Savings and credit co-operative — Umwalimu Sacco — as it is looks to wean itself off government subsidies.
The cost of the planned ultra-modern office block will be funded using members’ subscriptions, which will quadruple from Rwf10,000 ($11) to Rwf40,000 ($47) in a phases over the next two and half years.
The sacco’s management says a 2015 general assembly approved the increment, but not the modalities of paying the funds.
Laurence Uwambaje, Umwalimu Sacco managing director told Rwanda Today that the money, will be deducted from members’ salaries effective January, but can be paid in full or in monthly installments depending on individual members.
“This financing option was reached after an assessment showed other options such as using sacco savings could affect our services as a young financial institution,” said Ms Uwambaje.
Umwalimu sacco currently has over 75,000 members who are classified as A2, A1 and A0 degree teachers.
According to the funding model, A2 teachers will contribute Rwf1,000 ($1) per month each for 30 months; A1 teachers will contribute Rwf1,700 ($2) each for 18 months; A0 teacher will contribute Rwf2,500 ($3) to reach the Rwf40,000 ($47) share capital in 12 months.
Umwalimu SACCO heavily depends on government grants to offer loans to teachers, who are ranked among the least paid public servants in the country.
Ms Uwambaje said the sacco has its headquarters and 30 branches in temporary premises.
Amid pressure to extend services to all its members and become a self-reliant microfinance institution that can sustainably provide loans to its members, the management say there is an urgent need to own permanent premises.
The plan is to have all members pay their contributions in two-and-a-half years’ time, putting total share capital to more than Rwf3 billion ($3.5 million) from Rwf750 million ($885,000).