By Nathan Nwakamma
The Director, Bayelsa Bureau for Cooperative Development, Mr Frederick Sese, has advised cooperative societies in the state to operate a sustainable model to safeguard contributors funds.
The News Agency of Nigeria (NAN) reports that Sese made the call at a meeting with representatives of various cooperative societies in the state.
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 were 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 per cent monthly and above returns on contributions as unrealistic, illegal and not sustainable given the current economic situation in the country.
The director, therefore, directed immediate reversal of existing and new contracts agreement to 15 per cent.
Sese maintained that the by-law stipulated 20 per cent 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 were luring unsuspecting members of the public with unrealistic percentages, ranging from 25 to 35 per cent that were neither feasible nor sustainable.
The director said that 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 per cent interest rate as take-off for the respective societies operating in the state.
He added that the approval could be reviewed upward to 20 per cent ceiling based on the performance of the affected cooperative society.
The director noted that approved interest rate on loan is 15 per cent while dividend on shares holding to members is 20 per cent.
Sese, who emphasised the need for strict compliance with the Cooperative Act, said this was the only way to win the confidence of members and put the cooperative societies on a path of steady growth.
According to him, the Act stipulates that any member who wants to terminate membership or withdraw contributions, will have to wait for a period of six months before terminal payment will be implemented.
Sese advised the management of cooperative societies engaged in foreign exchange trading to structure their operations along cooperative by-laws by ensuring the submission of financial reports to the bureau by April 30 every year.
He also emphasised the need for meeting with members on a 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 for changing the investment narrative of the state. (NAN)