A cross section of Walimu Teacher’s SACCO board members
HABARI DAILY I Kampala, Uganda I Teachers’ sleepless days due to distress calls from multiple financial institutions could soon come to an end as the Uganda National Teachers’ Co-operative Savings and Credit Union (WALIMU) moves to buy off loans owed by teachers to commercial banks and microfinance institutions.
The initiative is aimed at teachers who have become trapped in multiple expensive loans, often taking on fresh debts to service existing obligations and sinking deeper into financial distress.
The new WALIMU leadership has resolved to identify such teachers across the country, voluntarily clear their outstanding loans with other financial institutions and refinance them under the teachers’ cooperative.
WALIMU board chairperson Stephen Olinga said the programme would be rolled out district by district as the cooperative seeks to bring indebted teachers back into a financial institution created specifically to serve their interests.
“We have resolved to smoothly and simultaneously buy off loans that our teachers have got from other financial institutions,” Olinga said.
He said the initiative would allow teachers to “come back home” to their own cooperative, where they can access credit under more manageable terms while enabling WALIMU to expand its membership and lending base.
From multiple loans to one
The proposal comes against a backdrop of concerns over teachers borrowing from several lenders at the same time, exposing them to high interest costs and multiple deductions from their salaries.
WALIMU hopes that consolidating such loans under its system will reduce the pressure on borrowers and give teachers a more structured repayment arrangement.
The cooperative was established by Government in 2011 to address teachers’ financial challenges and improve their social and economic wellbeing through affordable credit.
Government has since injected Shs27 billion into WALIMU as a revolving loan fund intended to support teachers’ savings and credit cooperative societies (SACCOs) across Uganda.
But the cooperative is itself facing a major financial challenge, with about Shs11 billion of the Government-supported funds tied up in non-performing loans.
Shs11b recovery challenge
Recovering the money from defaulters is one of the first major tests for Olinga and the board, which was elected by members last month.
Robert Bariyo Barigye, commissioner for cooperative policy and development and registrar of cooperative societies at the Ministry of Trade, Industry and Cooperatives, has given the new leadership until March 31, 2027, to recover at least 80 percent of the outstanding loan portfolio.
Government has also tasked WALIMU with strengthening supervision, accountability and governance as it pursues the money locked in defaulted loans.
Olinga said the recovery exercise cannot be separated from rebuilding confidence among teachers and their SACCOs.
The board plans to work with district education and human resource officers to verify borrowers and facilitate recovery without unnecessarily disrupting teachers’ work.
The strategy will also involve identifying dormant SACCOs that can be revived and establishing new ones in districts where teachers are still outside the cooperative system.
75 percent of SACCOs dormant
The scale of the challenge becomes clearer in WALIMU’s membership structure. The union has 385 registered teachers’ SACCOs across the country, but only 39 are currently active, according to Ministry of Trade data.
More than three-quarters of the registered societies are dormant, limiting WALIMU’s ability to reach teachers and provide affordable financial services. At the last annual general meeting, only 38 SACCOs were eligible to participate because of compliance requirements and other unresolved issues.
For the new leadership, reviving these societies will be as important as recovering the Shs11 billion in defaulted loans.
Olinga said the cooperative intends to restore confidence by improving engagement with teachers and ensuring that SACCOs operate effectively.
Second phase of financing
The loan buy-off plan comes as WALIMU launches the second phase of its financing programme, with leaders of teachers’ SACCOs undergoing training before funds are disbursed.
Speaking during the phase-two pre-disbursement training at Kyoto in Namugongo, Kira Municipality, Wakiso District, WALIMU general manager Caroline Atai said the cooperative was changing its approach to lending.
The training, attended by about 58 SACCO leaders, was designed partly around lessons from the first phase, when teachers received funds without sufficient preparation on how to invest the money.
Atai said the focus should no longer be simply on helping teachers access money, but on ensuring that borrowed funds are used to generate sustainable wealth.
She warned SACCO leaders against borrowing for projects without first establishing whether there is a ready market for the goods or services they intend to produce.
The warning reflects WALIMU’s desire to prevent another cycle of poorly planned borrowing, investment failure and loan default.
Rebuilding the teachers’ financial home
The proposed loan buy-off therefore represents a delicate balancing act for WALIMU. On one hand, the cooperative wants to expand lending and bring teachers who have sought expensive credit elsewhere back into its fold. On the other, it must recover billions of shillings already lost through defaults and strengthen the SACCOs through which it reaches teachers.
If successfully implemented, the loan consolidation programme could give heavily indebted teachers a chance to restructure their finances while reducing their dependence on multiple commercial lenders.
But WALIMU’s leadership will also have to ensure that the initiative does not simply transfer existing bad debts into the cooperative without addressing the reasons teachers became over-indebted in the first place.
For Olinga and his board, the immediate task is therefore not merely to lend more money, but to create a stronger teachers’ financial system where affordable credit, responsible borrowing, effective SACCO governance and financial literacy work together.
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