Posted by News Express | 21 May 2021 | 896 times
The Director, Bayelsa Bureau for Cooperative Development, Frederick Sese, on Thursday advised Cooperative Societies in the state to operate a sustainable model to safeguard the funds of contributors.
Sese made the call at a meeting with representatives of various Cooperative Societies in Bayelsa.
He said the aim of the meeting was to appraise their activities, performances, especially the sustainability of the monthly surpluses payable to members on their contributions.
Sese noted that some Cooperative Societies in the state are operating outside the confines of the law as enshrined in the Cooperative Act 2004, especially in the area of monthly and yearly returns payable to members or investors on their contributions.
He described promises of payment of 20% monthly and above returns on contributions as unrealistic, illegal and not sustainable given the current economic realities, and therefore directed immediate reversal of existing and new contracts agreement to 15%.
The Director maintained that the by-law said the law stipulated 20% maximum interest rate payable to members on their contributions, adding that any percentage above this, is illegal.
He said the Bureau has discovered that some Cooperative Societies are luring unsuspecting members of the public with unrealistic percentages, ranging from 25% to 35% that are neither feasible nor sustainable.
He said the Bureau could no longer condone the activities of some of the Cooperative Societies, describing it as inimical to the economic growth of the state.
Sese stated that the Bureau has approved 15 percent interest rate as take-off for the respective societies operating in the state, adding that the approval can be reviewed upward to 20% ceiling based on the performance of the affected Cooperative Society.
The Director added that approved interest rate on loan is 15% while dividend on shares holding to members is 20%.
Sese who emphasised the need for strict compliance with the Cooperative Act said this is the only way to win the confidence of members and put the Cooperative Society on a steady path of growth.
He explained that the Act stipulates that any member who wants to terminate membership or withdraw contributions would have to wait for a period of six months before terminal payment would be implemented.
Sese advised the management of Cooperative Societies engaged in Foreign Exchange to structure their operations along Cooperative by-law by ensuring submission of financial reports to the Bureau by April 30, every year.
He also emphasised the need for meeting with members on quarterly basis.
He said that foreign exchange trading using the cooperative model has made significant contributions to the economic growth of the state.
Sese commended the management of the various cooperative societies in the state for changing the investment narrative of the state.
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