Trade minister Amelia Kyambadde has expressed fears that the government proposal to remove deduction codes from the payroll will lead to the collapse of Saccos.
Speaking at the Uganda National Teachers’ Union sacco annual general meeting in Kampala at the wekeend, Ms Kyambadde said most civil servants depend on loans acquired through Saccos because their earnings are little. She warned that if government implements the proposal, the Saccos would collapse.
“The removal of deduction codes from the payroll is going to affect Saccos. That proposal is very dangerous. The cooperative movement will definitely collapse because recovery will be impossible,” Ms Kyambadde said.
“It is not about teachers alone. This affects the police officers, prison officers and all civil servants. Their salaries are so low. They have been depending on loans to improve themselves and deductions done automatically from their payroll. But how will Saccos survive if there is no recovery?” she asked.
Mr Stephen Nabende, the Unatu Sacco chairperson, urged the government not to stop payroll deductions, saying it would affect their loan recovery. “Most of our teachers depend on loans to pay fees for their children and the money is recovered from the payroll,” Mr Nabenda said.