Sort mess at teachers' Sacco, says co-operatives official

Stringent measures have been called for before the cash-strapped Isiolo Teachers Savings and Credit Co-operative Society can be bailed out.

County Co-operatives Chief Officer, Hudson Kinyua, yesterday asked the Sacco's interim officials to clean up the mess created by the former management.

Mr Kinyua said the county government was ready to inject a Sh10 million loan to rescue the Sacco from collapse, but only after a thorough review and clean up of the Sacco's financial records.

This demand follows a similar one Mr Kinyua made in September when he called for an audit of the Sacco's financial books and directed that a special general meeting be convened.

The special meeting was held three weeks ago and members kicked out the Sacco's officials and picked an interim team to replace them.

One of the reasons given to explain the Sacco's current status was the management's decision to give loans to undeserving members without any collateral.

Angry teachers said they had been unable to get loans over the last one year and expressed a fear of losing their money.

Kinyua urged the teachers to be patient, saying his department would follow the law to recover any lost money.

"We will follow up this matter and not relent until the teachers' money is recovered from individuals behind this mess," he said.

Kinyua said the Sacco's two-year liquidity problem could be attributed to poor financial management, which he promised would be investigated by the audit section of his department.

Bad business

"Every effort will be made to reverse this trend that has seen members not earn dividends or get loans due to a backlog," he said.

Kinyua condemned the previous management's decision to borrow money from banks at high interest rates and loan the same money to members at low interest, saying the practice was "bad business".

He said the Sacco was blacklisted by the Societies Regulatory Authority and could no longer get bank loans.