The leadership of the UPDF’s savings cooperative, Wazalendo Sacco has defended a move that will see creation of a special reserve fund for money on dormant accounts of members who have either deserted the force or are dead.
It was reported that the proposal to transfer shs6.1 billion accumulated because of dead soldiers and those that had deserted the force to a pool account instead of giving it out to beneficiaries had kicked off storm between junior and senior commanders during the sacco’s just concluded Annual General Meeting held at the Uganda Military Engineering College in Lugazi last month.
However, addressing journalists on Thursday, Col Joseph Fred Onata, the Wazalendo Sacco Chief Executive Officer said the move to create a special reserve fund was informed by the need to cut costs of running separate accounts which are dormant.
“We have been holding these monies for 15 years in the individual member’s accounts which are classified as dormant. Maintaining these inactive accounts is expensive in terms of interest paid and also poses a risk yet the board of directors and management cannot decide on their own on what to do with those funds,”Onata said.
He explained that both management and the board of directors came up with a proposal to create a special fund to hold the monies for the dead members and those that deserted and that the same was shared with the delegates during the regional pre-AGM meetings and was agreed upon.
“The members of the 15th AGM were therefore not surprised by the proposal since it had already been discussed. What the board of directors and management required from the AGM was the resolution and guidance on how to manage the fund once a special reserve fund is created in accordance with the law.”
According to Col Onata, it was agreed that the board of directors shall maintain a record of all the members whose funds are transferred to the special reserve fund and that the same will always be available whenever members resurface to claim them.
The Wazalendo Sacco leadership however dismissed as untrue reports that all soldiers are obliged to contribute 10% of their monthly salary to the Sacco in addition to shares each costing sh15000.
Onata explained that no member is obliged to save or buy shares in the sacco but rather everyone is at will to determine shares to buy, provided they are not more than a third of the total shares of the sacco.
On reports of overstaying of the Wazalendo Sacco’s 10 per cent of their monthly salary to the Sacco, Onata explained they are in office legally awaiting the next Annual General Meeting to hold elections.
“Our AGM brings more than 400 delegates and we were supposed to hold one and hold election between March 25 and 26 2020 but we were affected by the Covid lockdown which was imposed on March 18.We can only hold elections in an AGM attended by all delegates,” the Wazalendo Sacco CEO said.
He added that they sought guidance from the registrar of cooperatives who granted an extension of term of office for the current 10 per cent of their monthly salary to the Sacco until it is feasible to hold elections.
He said they hope by early next year, Covid restrictions of meetings will have been relaxed for the AGM and subsequent elections to be held.
The Wazalendo Sacco is the biggest savings and cooperative society in the country with over 80,000 members, shs213 billion share capital, shs180.5 billion in savings and shs388 billion loaned out to members.
The UPDF sacco is also the sixth biggest in Africa.