Business people, members of SACCOS, Micro-Finance institutions and banks have been warned to be keen whenever calls to guarantee colleagues arise due to the notable skyrocketing rate of loan defaulters.
According to the lending laws, a guarantor is responsible for any loan recovery in case the borrower does not honour the terms of payment agreed upon at the time of lending.
Benedict Wekesa Simiyu, the Chairperson of Ng’arisha SACCO admits that the institution has encountered tremendous challenges relating to guarantors, many of them supporting people to get loans without knowing who they were and in the long run finding themselves in hot soup after their anonymous clients defaulted on loan repayments.
Simiyu was speaking on Tuesday during a members’ education and sensitization seminar, on guaranteeing wisely and proper utilization of loans pursuant to the societies act that obligates all societies to offer training to their members.
Ng’arisha SACCO has been an outstanding financial institution formally comprising of teachers but expanded boundaries due to necessity for investment by small business holders, bodaboda riders, other civil servants and society at large.
The SACCO CEO, Wamukota Marklyne attributed the sustainability of the institution to the growing membership that has recently shot to over 14,000.
He further explained that apart from being a source of loan during emergency, it was also a proper investment for the future and a hope for those who retired as members of the society.
Members were also called upon to use the society as a source of capital rather than a source of income adding, “some members borrow loans to use for less important and unplanned activities and end up in financial straits which end up with them dodging society officials,” he said.
For business loans, the members have been sensitized on the need for proper business and investment plans that could generate income to pay back the loans.
The youth, women and those living with disability have been largely encouraged to join groups and SACCOs to support each other on matters development.
The training was centered on encouraging the youth to start saving early for their future and the aged to keep saving regardless of any uncertainties including death.
Some of the beneficiaries of SACCOs have admitted to the noble role the societies have played in their personal development.
Led by Eli Kunikina from Kanduyi and Rosemary Makhanu from Tongaren, the members lauded Sacco societies citing the benefits they have got out of them, including buying land, educating children and building rental houses.
By Timothy Wekesah/ Roseland Lumwamu