21 June 2014

Tanzania: Retirees Have Role to Play in Economy - Luhanjo

CIVIL servants are urged to be innovative and accommodate challenges they face in bringing about socio-economic development in the country.

Launching a new scheme for pensioners known as "Wastaafu' loan" in Dar es Salaam on Friday, retired Chief Secretary, Mr Philemon Luhanjo said that retirees have a role to play in the country's economy.

"Retirement does not mean that you are a liability to the community. We should change our mind set and respond to current world challenges," he insisted. Public Service Pensions Fund (PSPF) in collaboration with Tanzania Postal Bank (TPB) have come up with a loan scheme that will benefit PSPF members.

Mr Luhanjo said that the loan scheme is aimed at making retirees meet basic financial needs and generally make their lives better by enabling them manage small businesses, pay school fees, and foot medical bills.

He insisted that a few retirees have set up projects in agriculture and bringing about a multiplier effect, as a number of youth are employed in these projects.

According to Mr Luhanjo, many retirees end their lives prematurely, due to frustrations when they fail to yield profits from their businesses. Speaking at the occasion, PSPF Director General, Mr Adam Maingu said for a long time, local financial institutions have not been issuing loans to retirees, thinking that they are unable to service such credit facilities.

"Having realised that, PSPF and TPB jointly came up with this special plan that will extend loans to PSPF members. Our research has so far shown that retirees contribute billions of shillings in the money circulation every year," he said.

Mr Maingu said PSPF intends to help all its retirees avoid social and economic disasters related to improving income. TPB Director General, Mr Sabasaba Mushingi called upon financial institutions including banks to come up with programmes for retirees. So far, over 2,000 people have already benefited from this loan scheme.

According to Mr Mushingi, a retiree who is applying for a Wastaafu loan, one is not required to have collateral and since the loan is insured, relatives will not be disturbed even after the death of the beneficiary.

The interest rate for this kind of loan is 12 per cent per year, and all PSPF members are entitled to this credit facility that is payable within three years.

One of the beneficiaries, Ms Cecilia Ngombale recounted how the loan improved her life after she retired from public service. "The loan helped me pay school fees for my children" she said. Another beneficiary, Mr Pudensiana Gwaka also said she has opened a small business that is paying off thanks to the Wastaafu loan she got from PSPF.

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