RETURN ON INVESTMENT IS 15% ANYTHING OTHER THAN THIS UNHEALTHY AND UNACCEPTABLE…. BAYELSA STATE GOVERNMENT
Bayelsa Bureau for Cooperative Development parley with management of Cooperatives Societies, orders downward review of interest on contributions to 15%, …….6 months period for termination, withdrawal of contributions
The Director, Bayelsa Bureau for Cooperative Development, Barrister Frederick Sese on Wednesday met with the representatives of various Cooperative Societies in Bayelsa State to appraise their activities/performances, especially the sustainability of the monthly surpluses payable to members on their contributions.
Barristet 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 percentage payable to members or investors on their contributions.
He described payment of 20% and above interest rates on contributions as outrageous, illegal and not sustainable, and therefore, ordered immediate reversal of existing and new contracts agreement to 15%.
The Director while quoting copiously from 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 the innocent public with outrageous percentages, ranging from 25% to 35% that are not 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.
Barrister 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%.
Barrister 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 wants to terminate his/her membership or withdraw 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.
Barrister Sese advised the management of FOREX Cooperative to structure their operations along Cooperative by-law by ensuring submission of financial reports to the Bureau by 30th April each year.
He also emphasized the need for meeting with members on quarterly basis.
He said the Bureau was not unmindful of the impact FOREX has brought to the state, and, therefore, commended the management of the various cooperative societies in the state for changing the investment narrative of the state.
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