FINANCIAL COOPERATIVES THREE-MONTH MORATORIUM ON LOAN REPAYMENTS
The above captured subject refers.
Reference is made to the Presidential Directive regarding Covid 19 measures and the joint media communication by the Governor of Reserve Bank of Malawi (RBM) and the Chief Executive Officer (CEO) of Malawi Union of Savings and Credit Cooperatives (MUSCCO) dated 21st April, 2020.
This memo therefore seeks to clarify the issues as explained in the joint media communication and how the same will be implemented by Chitukuko SACCO.
What does the Directive mean?
The directive is meant to protect members who borrowed from SACCOs and might be facing difficulties to repay their loans because the source of their funds has been affected by the Covid -19 pandemic. In our case, working employees – borrowers who are not receiving their normal salaries because their employer’s business has been affected by Covid – 19. Members that find themselves in these predicaments are to be considered by the SACCO; it is recommended that their loan repayments be suspended for a period of three months. Please note that the joint communication is NOT generalizing ALL members but only those whose source of income has been affected. This is why the joint communication is indicating; on case by case basis.
How Chitukuko SACCO is going to implement the Directive
Chitukuko SACCO is considering the affected members on a case by case basis. Borrowers with such problems are being considered upon production of a supporting document, say, a letter from employer confirming that salaries are not paid due to the effects of the Covid-19.
An appeal to each one of you.
SACCO is a revolving fund. The loans that we disburse comes from the monthly contributions and loan repayments. If the source of funding for the SACCO is affected, so will be the disbursement part. I am therefore urging every member not to abuse the measures put in place as this might have a direct bearing on our liquidity position and above and beyond, the existence of Chitukuko SACCO might be at risk.
Lastly, the SACCO would like to remind each one of us to observe the preventive measures as highlighted by the Ministry of Health. Together, we can fight this pandemic; stay safe.