The Bayelsa State Bureau for Cooperative Development has ordered cooperative societies in the state, paying above 20% interest on contributions to effect a downward review to 15%.
The Director, Bayelsa State Bureau for Cooperative Development, Mr Frederick Sese gave the order on Wednesday, May 19 while speaking at a meeting with representatives of various cooperative societies operating in in the state.
The meeting was called to appraise the activities and performances of the cooperative societies, especially the sustainability of the monthly surpluses payable to members on their contributions.
Sese described the payment of 20% and above as interest rates on contributions as outrageous, illegal and unsustainable, and therefore, ordered the immediate reversal of existing and new contract agreements to 15%.
He said the Bureau has discovered that some cooperative societies are luring the innocent public with outrageous percentages, ranging from 25% to 35% that are not sustainable.
The Cooperative Development Bureau boss 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 percentage payable to members or investors, on their contributions.
Quoting copiously from the by-laws, Sese 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 could no longer condone the activities of some of the cooperative societies, describing it as inimical to the economic growth of the state.
Sese however 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%.
Mr Sese, who stressed 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 good stead.
He said any member who is desirous of terminating his or her membership or wishes to withdraw his or her contributions, should know that they would have to wait for a period of six months before terminal payment would be implemented and it was even subject to availability of funds.
Cooperative societies in the state were advised on the need to hold meetings with their members on quarterly basis.
Reacting to this development, an investor with one of the cooperative societies in Bayelsa State, who pleaded anonymity, said “if the directive to revert to 15% is intended to strengthen the cooperative societies then it is a welcome move. As they say, half bread is better than none at all”.
The respondent, who is a civil servant, however said it would have been better if government had made the directive to take effect with new investors and not old members, who have a subsisting agreement with the cooperative societies, asking rather rhetorically if the investors existing agreements would be altered to suit the current development.
Another investor, who was obviously angry with the development, retorted in pidgin English, “wetin concern government for this matter when dem dey come pour sand inside person garri?