{UAH} NSSF SAVERS SHOULD BE ABLE TO USE PORTIONS OF THEIR SAVINGS AS COLLATERAL FOR LOANS AND MORTGAGES:

By Augustine Ruzindana

The issue of accessing part of NSSF savings as a response to the Covid-19 pandemic has been under discussion for quite sometime, since the lockdown incapacitated many people from earning any income. The percentages suggested are arbitrary, so it doesn't matter whether it is 10, 20 or 30%.
To understand this issue a number of questions arise: 1. What is the total number of NSSF savers? The number of ACTIVE savers is actually small, possibly less than 1 million, even though those registered with NSSF may be more than 2 million. 2. Of the millions whose sources of income have been disrupted, how many of them or what proportion of them have NSSF savings? For example, do boda boda and public service vehicles operators, e.g drivers and conductors, have NSSF savings? Do shopkeepers and their staff have NSSF savings? Were all the market business people wose businesses were closed because they were not dealing in food related items savers in NSSF? Therefore 3. Who or how people would get pandemic relief from access to a portion of their NSSF savings?
Could it be that another outstanding issue namely: whether the age of access should be lowered or not, or whether there should be an option for early access to savings is actually what is at issue? For quite sometime this question has arisen and it has never been disposed of. The rationale for this proposal has been that people should access their savings when they are still strong and active and can put their savings to good use. Now in the current debate this relatively sound reason has been forgotten. May be this issue is the one that should be revived as it is not tied to a pandemic emergency.
The proposal I would like to make as an alternative to the ones above is that NSSF savers should be able to use portions of their NSSF savings as collateral for bank loans and mortgages. The rationale is that the savings are an asst of the saver and this asset should be available to used as collateral like all other assets. This facility too would require amendment of the law and some changes in NSSF and banks procedures. It would also save NSSF savers certain loan expenses like those related to valuation of property and other legal and accountants charges. This is a proposal government and trade unions should adopt and have it passed by Parliament. I recommend serious consideration of this proposal by NSSF as well as it would not affect their investment portfolios and their cash flow.

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"When a man is stung by a bee, he doesn't set off to destroy all beehives"

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