Lawmakers have criticised the
This was during a meeting between NSSF management and the select committee investigating allegations of the fund's mismanagement on Wednesday,
The Chairperson of the select committee, Hon. Mwine Mpaka questioned the management's decision under the leadership of former Managing Director,
He was speaking in reference to the Auditor General's management letter which indicated that the loan was disbursed in 2010, with a repayable period of 96 months. The report noted that up-to-date, no amount has been recovered.
"You [Byaraguba] were the chairman of the audit committee, the same year the unsecured loan was given to
This prompted Workers' representative, Hon. Charles Bakkabulindi to seek clarification on the difference between the savers' fund and commercial banks.
"Does the savers' fund now operate like a commercial bank? You mean the fund now has reached an extent of behaving like commercial banks? Bakkabulindi asked.
Hon. Richard Gafabusa (NRM, Bwamba County) asked if a risk evaluation was performed before the loan was disbursed, to which the NSSF's Head of Risk, said it was irregular to give an unsecured loan to
Byarugaba explained that the loan was provided to enable
"They sought to set up a new factory in Mbale, good idea but badly executed. The products that were coming out did not sell, the loses were high," said Byarugaba.
To redeem the company, Byarugaba said that NSSF intervened and took over management so as to recover the loan.
"The fund was under obligation to take reasonable steps to recover the loan. Having seen that this company in which we have a big share was going down, we seconded two of our staff and the company has turned around and become profitable," he said.
He added that, 'the company has re-instituted the loan on its books and the fund members are assured that their money is safe'.
The MPs also expressed disappointment with the NSSF's management for causing the fund a loss of Shs2.6 billion in procurement of smart cards and point of sale machines for savers.
In
Hon. Mwine Mpaka however, highlighted the Auditor General's report, indicating that since it was launched, the product has not been used.
He asked why the management proceeded to procure the pay point machines, even after establishing that the cards could not serve the purpose for which they were introduced.
"You fly to
Hon. Gafabusa wondered why NSSF did not take precautionary measures through ensuring that the contract with suppliers provided guarantee to the fund.
"If the card did not meet the fitness test, why wasn't it returned and money claimed?" he asked.
NSSF's Head of Procurement,
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