Managing loans is an essential skill for maintaining financial stability, especially in today’s economic environment. In our recent ProDev Hour session, held on 5th December 2024, we discussed practical strategies for effective loan repayment and fostering financial health and professionalism. The session was moderated by Mr. Ngabirano Gyavira, the UPSTU coordinator in Kamwenge District and was facilitated by Chemisto Sulaiman, Treasurer of UPSTU Members’ SACCO, who provided invaluable insights tailored to science teachers and professionals struggling with multiple loans.
Key Takeaways from the Session
1. Understanding Loan Terms
Chemisto emphasized the importance of understanding the terms of your loan before signing on the dotted line. This includes interest rates, repayment schedules, and late payment penalties. Knowing these details will help you avoid unexpected charges and make informed decisions.
2. Developing a Repayment Plan
Creating a comprehensive repayment plan is crucial. This involves:
- Listing all loans, their interest rates, and due dates.
- Prioritizing high-interest loans to minimize costs.
- Incorporating loan repayments into your monthly budget.
3. Staying Consistent with Payments
To avoid missing payments, set up reminders or automate your repayments. This ensures you stay on schedule and avoid unnecessary penalties.
4. Making Extra Payments
Whenever possible, use extra income to make additional payments towards your loans. This strategy reduces the principal amount, saves on interest, and shortens the repayment period.
5. Communicating with Your Lender
If financial challenges arise, proactively engage with your lender to explore options like restructuring or repayment extensions. Open communication can help you avoid defaulting on loans.
Loan Management and Financial Health Strategies
Budgeting and Cutting Costs
Chemisto outlined several strategies, including: understanding loan terms, creating a repayment plan, setting up payment reminders, making extra payments when possible, and communicating with the lender. He emphasized the importance of these strategies to avoid unexpected charges and penalties, and to manage loans effectively.
Increasing Income
Exploring side hustles or freelancing can provide extra funds to accelerate loan repayments. However, Chemisto advised remaining professional and ethical while pursuing additional income streams.
Avoiding New Loans and Wasteful Spending
Taking on new debt while repaying existing loans can complicate your financial situation. Prioritize clearing current loans before considering new ones.
Interactive Q&A Session
Participants raised important questions during the session, including:
Membership and Loan Process
Chemisto stressed that UPSTU Members SACCO started in 2020 and has been serving its members with savings and loan services, even before the recent grant from government to teacher saccos. He explained the process of becoming a member of their organization, which involves paying a minimum of 120,000 shillings, including 50,000 for membership, 50,000 for shares, and a minimum of 20,000 for savings. Members can save more than the minimum and buy as many shares as they wish, but the maximum shareholding should not exceed 33% of the total shares. Chemisto also clarified the interest rates for loans, which are categorized based on the loan duration, starting with 3% for one to four months. Lastly, Chemisto stated that it takes at least four working days for the committee to process a loan application.
Sacco Membership and Union Contribution Clarification
Javilla asked if a group of science teachers could apply to be members of the Sacco as a group or as individuals. Chemisto clarified that it’s better to first become a member individually, then form a group. He also explained that the 1% contribution to the Union is a requirement by law and is separate from the Sacco. .
Loan Products and Eligibility Criteria
In the meeting, Chemisto mentioned the various loan products offered by their organization, including emergency loans, salary loans, agricultural loans, corporate loans, micro loans, quick loans, government loans, business loans, and financial loans, and requested for members to always check the sacco.upstu.org website for more information about sacco products and services. He emphasized that the amount of loan a member can receive is not solely based on the number of shares they hold, but also on other factors such as their salary, character, and capability. They also mentioned that they do not give loans to people who already have loans with other banks. He encouraged the members interested in loans to follow the normal laid out procedure to fill in application forms which the loan committee will base on for due diligence and loan processing.
Closing Remarks
Teachers Questioned About Multiple Loans And Extravagant Usage
Mr. Chemisto Sulaiman raised a thought-provoking concern about the growing trend of teachers taking on multiple unplanned loans with money lenders ‘loan sharks’, while indulging in extravagant spending habits. He cautioned that such financial behaviors can trap teachers in a cycle of debt, hindering their ability to achieve financial stability. Chemisto emphasized the importance of careful financial planning, urging teachers to evaluate the necessity of every loan before applying and avoid using borrowed funds for non-essential expenses like lavish parties or luxury items. He reminded participants that loans should primarily be utilized for income-generating or development purposes to ensure long-term benefits. Through discipline and intentional financial decisions, Chemisto encouraged teachers to regain control of their finances and secure a healthier financial future.
The session concluded with an emphasis on teamwork and growth. Participants were encouraged to borrow responsibly, invest in shares, and actively participate in the SACCO for mutual benefit. Chemisto thanked the attendees for their engagement and highlighted the increasing membership of the SACCO across the country. Mr. Begumisa Julius expressed gratitude for the detailed presentation and appreciated the progress of the Sacco. He encouraged other members to borrow and invest in shares, emphasizing the importance of teamwork and growth.
Watch the Full Session
To gain deeper insights into loan repayment strategies and SACCO membership benefits, watch the full session recording below:
Stay tuned for more ProDev Hour sessions, held every Thursday from 8–9 PM, aimed at building capacity, fostering innovation, and empowering professionals.
📢 Want to join the next session? Join in Every Thursday
⏰ Time: 8:00 PM – 9:00 PM
💻 Where: Zoom (Online Session)
🔗 Join Live: https://us06web.zoom.us/j/86142949845?pwd=ihmkOOEFNLPQHTIqtfmGbhOT1WQ0oX.1
Zoom ID: 861 4294 9845 | Passcode: UPSTU
TeacherEmpowerment #ProfessionalDevelopment #FinancialHealth #LoanRepayment #UPSTUProDev #SACCO