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MBABANE – It will no longer be a walk in the park for SNAT members to get a loan through their co-operative.
Infact, members of the SNAT Savings and Credit Co-operative Society are frowning upon the enforcement of the Consumer Credit Act, 2016 which compels the co-operative to ‘screen’ members before issuing loans.

SNAT is an acronym for Swaziland National Association of Teachers.
Some of the members of the co-operative are even threatening to terminate their membership with the co-operative.
The Act is regulated by the Financial Services Regulatory Authority (FSRA).

SNAT Savings and Credit Co-operative Society (SACCO) is a teachers’ savings scheme, whose membership is made up of teachers, lecturers in colleges and institutions of higher learning in the country and employees of the society and those of SNAT Union.
The society was formed and launched in 1986 and to date has an active membership of almost 12 000 people, according to its website. 


The objective of the co-operative is to promote economic interests of its members in accordance with the co-operative principles and the encouragement of members, in the spirit and practice of thrift, mutual and self-help.

However, members of the co-operative have been making noise about the enforcement of the Act, in that the lender has to do what is termed as the credit bureau clearance process, popularly referred to as ITC clearance, which seeks to determine if a consumer is not over-indebted and that there are insufficient funds to support a reasonable debt re-arrangement plan.

From the arguments of the members, it was deduced that the ITC clearance process was not done by the lender until recently when the FSRA enforced the clause of the Act which looks into the consumer credit information by the lender before agreeing to issue a loan.

The consumer credit information relates to information concerning the credit history of a person, including application for credit, credit agreement to which the person is or has been a party, patterns of payment or default under that credit agreement, debt re-arrangement in terms of this Act, incidence of enforcement actions with respect to that credit agreement, the circumstances of termination of that credit agreement and related matters.
The argument by the members of the co-operative was that a majority of them had unsettled credit, particularly with clothing retail shops and that would mean they would not qualify to get the loans from the co-operative when they do the ITC clearance.

One aggrieved member was quoted saying, “We would have no option, but to resign as members of the co-operative because it would be of no help to maintain membership when our requests for loans would be declined due to the screening of the consumer credit information. This is the end to co-operative.”
Another argument by the members, even those who would not be affected by the consumer credit information, was that if membership declined, the dividends that they were entitled to at the end of the year would take a nose-dive as well.

“Last year, we got about 8.5 per cent dividends and it was eight per cent the year before, but they are likely to decline massively this year if members do not have access to loans due to the clause on consumer credit information,” said another member.

A source, who is also a member of the co-operative, asserted that usually, the credit agents would only determine if a consumer was not paying over two thirds of their salary to service loans and that was the common basis for one to qualify for the loan. Section 90 of the Consumer Credit Act states that a debt counsellor may reject an application where the counsellor concludes that the consumer is over-indebted, and shall, on conclusion that a particular credit agreement appears to be reckless, report the reckless credit to the authority.


When contacted on the issue, SNAT Co-operative Chairperson Nozipho Dlamini confirmed to have received a letter from FSRA which advised the institution to adhere to the principles of the Act before issuing loans.

However, she said currently, the loan applicants were not ‘screened’ as the principles of the Act were yet to be enforced.
“If members are aggrieved on issues relating to the organisation, they should feel free to come to us, not to discuss these issues in other platforms,” she said

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