PROMOTION of Rural Initiative and Development Enterprises Limited (PRIDE Tanzania), one of the leading microfinance institutions in the country is broke, meaning, it is now trading on a slippery road to collapsing, the ‘Daily News’ can authoritatively reveal.
Whether the financial institution would reluctantly remain in the market or pay a deserved price for administrative ineptitude – what is almost certain is that, Pride Tanzania is likely to pack up business and go off the market.
Impeccable sources from the company confided to the ‘Daily News’ that a greater percentage of employees were yet to be paid their salaries since January, 2018 and that part of the employees may soon be greeted by massive retrenchment.
“The company has been paying staff in confidence with many of us left in a dark cloud and we do not know when they will pay our salaries … I am a beneficiary of the Higher Education Student’s Loans Board (HESLB) and initially the company was remitting our deductions to the board but for quite a long time they have not been forwarding our deductions,’’
said an employee who preferred anonymity due to sensitivity of the issue. Inside information had it that one of the institution’s largest branches which used to collect at least 8m/- per day now collects hardly 22,200/- per day.
Branches such as Bagamoyo and Mwenge had lost customers and will be closed down anytime from now.Further information indicate that PRIDE’s branches countrywide are heavily indebted with rents and landlords having already issued notices to remove them.
PRIDE Tanzania is a micro finance institution involved in provision of credit to small and micro entrepreneurs in the country. It started its operations in January 1994 with its first branch and head office in Arusha.
The operations started with a two-year pilot phase which ran from September 1993 to August 1995 involving three branches in Arusha, Tanga and Dar es Salaam. Its major mission is to create a sustainable financial and information services network for small and micro-entrepreneurs in order to promote their business growth, enhance their income and create employment in Tanzania.
However, it now appears that the financial institution is broke as the fate of its customers remains in limbo. According to sources, the company, which has so far failed to clear its outstanding debt it owes the Tanzania Investment Bank (TIB) amounting to 5.3bn/-, has equally failed to remit to the NSSF Pension Fund money deducted from employees.
The company has further failed to pay monthly stipends of employees who are now worried of their jobs, following the ongoing financial crisis within the company which escalated after the Fifth Phase Government intensified its efforts on tax compliance.
By failing to remit statutory deductions to NSSF amounting to over 2bn/-, workers moved to court to demand that their money accumulated since December 2016 be sent to the pension fund.
Sources further hinted that PRIDE Tanzania failed also to remit Pay As You Earn (PAYE) as required by thealso to remit money to the Workers’ SACCOS, the money that ought to be deducted to employees’ salaries and channelled to the SACCOS.
What remains a mystery is the fate of the savings made by the financial institution’s customers as the cash strapped company operations remain on halt. Contacted, the Bank of Tanzania (BoT) Director of Banking Supervision,
Mr Kenned Nyoni told the ‘Daily News’ that PRIDE Tanzania had never been licensed by BoT, thus the central bank had nothing to comment regarding the ongoing company’s dilemma.
Inside information had it that PRIDE’s Managing Director Rashid Malima had fled to the US after siphoning off billions of shillings from the institution. PRIDE Tanzania’s Board Chairman, Prof William Lyakurwa, yesterday announced that the institution was no longer recognising Malima as their employee.
“For this information, PRIDE Tanzania will not be responsible nor recognise any transaction or contract made by Malima on behalf of the institution,” reads the public notice issued by Prof Lyakurwa.
According to him, the board has appointed Ms Ruth Urassa as General Manager who will be responsible for overseeing and managing all PRIDE’s activities. Another issue that raises eyebrows is the ownership of the company.
Last month, the Parliamentary Public Accounts Committee (PAC) Chairperson, Naghenjwa Kaboyoka said the microfinance institution was owned illegally and asked the responsible authorities to take legal actions against the owners of the microfinance company.
The 2015/2016 Controller and Auditor General (CAG) report queried the ownership of PRIDE Tanzania which was initially a public institution, before its shares were mysteriously and illegally transferred to private ownership.
Reports from the office of the Treasury Registrar show that all shares of PRIDE Tanzania were owned by the government until June 30, 2008. However, On June 30, 2012, the microfinance company was removed from the list of public institutions without giving details of the privatisation.