19 Mar 2019

Cooperatives have been advised to keep their enterprise model when engaging in projects because deviating could lead to challenges of financial accountability.

“If you want to engage in business investments, do it using the cooperatives enterprise model because cooperatives are allowed to operate businesses just like companies.

The problem when cooperatives establish companies is that those companies are not regulated, inspected and audited by the Department of Cooperatives because they fall under a different authority,” Mr Boniface Tsheko advised during the Lobatse Itshetseng Savings and Credit Cooperative Society (SACCOS) annual general meeting.

Mr Tsheko’s advice as the acting director in the Department of Cooperatives was prompted by a trend where cooperatives used members’ money to establish companies under different regulatory authorities which cannot be regulated, inspected and audited using the Cooperatives Act.

He also advised cooperatives to avoid running after wealth accumulation, but instead, to remain consistent with their objective of empowering their members through access to financial services at low and affordable interest rates.

The acting cooperatives boss said it was baffling to observe that some cooperatives charged high-interest rates to their members.

“What we observe in many cooperatives now is that some committees are actually running after profits and creation of wealth, forgetting that the main object of the society is not huge profits but to offer services at reasonable and affordable rates. If we offer services at exorbitant rates members will abandon the societies because they will no longer be fulfilling the objective for which they were established,” he advised.

Established in 1997 by 131 Lobatse Town Council (LTC) employees, the Lobatse Itshetseng SACCOS has grown in leaps and bounds over the years and currently boasts of around 1 650 members.

The cooperative draws membership from LTC employees, Southern District Council employees and employees of the Ministry of Health and Wellness within Lobatse and the Southern District.

It has business ventures in Lobatse as well as a bilateral company established four years ago with the Selebi Phikwe SACCOS.

The cooperative’s chairperson, Mr Aaron Mariri explained that they offered long-term and short-term loans to members at low-interest rates. He further said they had a funeral cover.

He said their objective was to develop further and play a meaningful role in the economic development of their town.

“Cooperatives have a lot of potential and should take business seriously in order to assist in employment creation in the community,” Mr Aaron said.

He said the cooperative’s members’ savings stood at P11.2 million while loans amounted to around P8 million. ENDS