In today’s episode, we discuss whether one can force their SACCO to pay rebates after paying off a defaulted loan they owe the SACCO.

I borrowed some money from my SACCO 3 years ago which I was to pay in 60 instalments over 5 years. However, around 1 and a half years ago, I started facing challenges in my business because of the COVID-19 Pandemic that prevented me from making payments regularly. I, therefore, fell very behind on my payments but would make a payment now and then when I could. 

Recently, the SACCO announced its the end-of-year results, and one of the things I was expecting was to receive a rebate, which I would have used to reduce my debt. However, I was shocked when the SACCO told me that they would not be paying my rebate. We went through the rules with the SACCO and there is nowhere it says if you’ve defaulted on your contributions that you are restricted from receiving Rebates. All it requires is that you’ve made at least 4 contributions of a certain amount in a year to qualify for rebates. When I showed this to the SACCO, they agreed I had met the requirements. However, they then claimed that they had not even charged me interest for my late payments and that if I insisted on the rebates they would load the interest on my debt for late payments. Right now, I decided to leave it because my business is still down and I might not be able to make regular payments and I don’t want to make them my enemies. But I want to know once I finally pay off my loan, can I force them to pay for those rebates which I believe are owed to me?

Research by Muendo Manthi (muendo@swalanyeti.org)