East African Business Week

Dar es Salaam, Tanzania - The Parastatal Pension Fund (PPF) has loaned out at least $.608, 077 (950 million) to ALAF SACCOS in a way to establish a loan scheme to its members mostly employees based Saving and Credit Co-operatives (SACCOS).
The $608,077 will see 300 members of the ALAF SACCOS in which each member may borrow up to $12,804 (Tsh20 million).
The PPF said it has responded  to 31 applications worth $.18 million (29 billion) mostly from different saving and Credit Co-operatives (SACCOS) in the country between 2004 to June 2011.
Lulu Mengele, the Public Relation Manager of PPF said that PPF have been exploring ways to unhook its members from the jaws of poverty, and in 2004, PPF embarked on the special loan to employee based SACCOS project to PPF members.
"In a struggle to eradicate poverty to our members, PPF will go on providing special soft loans, especially the Employees based SACCOS  with an increase of up to five years tenure," said Mengele. She said employee - based loans are of great advantage to the members as they will have a reduced payment burden due to long tenure of payment at an interest rate of 12% per annum. According to Mengele, the SACCOS member can borrow up to five times (5 times) of his/her savings shares and deposits.
Under the PPF Special Loan to Employees Based SACCOS about $.18 million (Tsh29 billion) benefited 31 SACCOSEs in the country. TBC, SIDO, NECTA, NBC, TVT, TANESCO, AICC, Mzumbe, Kilombelo and Mazinga are among the beneficial of the PPF Special Loan to Employees Based SACCOS.
Others are Mzalendo, Mweka, Mwauwasa, Postana simu, Mactaba, Mlimani, and Nyumbu.
Mr. Godbless Robiam, the PPF Pension Fund Senior Investment Officer told East African Business Week in Dar es Salaam that for the SACCOS to be eligible for the loan scheme, it has to be the employees based SACCOS and its members must be contributing to PPF.
He said the SACCOS must have the track record for three years of  operation and its accounts should be audited regularly
"The Parastatal lined up for privatization" Mr. Robiam said "will not be lined to borrow under this scheme".
According to the Pankaj Kumar, the ALAF Chief Operating Officer, the PPF loan schemes will ease the load to the employers as the employees will be able to get loans through their SACCOS.
"The employer will no longer set the money to loan the employees because the PPF loan will be there to supplement and reduce the burden," said Mr. Kumar.
Mr. Mustapha Mkulo, the Minister for Finance, during the budget presentation on June 8, told Parliament that the Government of Tanzania continued to implement the National Economic Empowerment Policy 2004 by providing soft loans through various funds and programmes; sensitization on forming cooperatives (SACCOS) and Village Community Banks (VICOBA) as the best way of getting soft loans, income generation, employment and poverty reduction.
According to Mkulo, the sensitization to the general public led to tripling of SACCOS from 1,875 in 2005 to 5,344 in 2010 and increase of SACCOS members from 1,360,850 to 2,100,000 during the same period.
 "SACCOS members' savings have increased more than five fold from 31.4 billion in 2005 to 174.6b in 2010," said Mr. Mkulo.
He further said that the Government of Tanzania in collaboration with economic empowerment stakeholders has prepared the framework for monitoring and evaluation of the National Economic Empowerment Implementation Strategy.