Kampala — Renowned agriculturalist and dairy producer Sam Mubiru Kizito has challenged National Social Security Fund (NSSF) to operative as a commercial bank so that pensioners can access low interest loans for personal development.
Mr Kizito, who was speaking to journalists after Nkumba University awarded him a honorary doctoral degree due to his distinguished contribution to the agricultural and dairy industries, said NSSF was cheating workers by lending money to commercial banks which borrow it to workers at high interest rates.
"Why should NSSF lend money to commercial banks at about 10 per cent interest yet the same banks lend it to pensioners at 24 per cent. That is cheating NSSF beneficiaries. It is time NSSF operated as a commercial bank so that workers can get access to cheap loans," Mr Kizito said.
In response, NSSF managing director, Richard Byarugaba, said turning NSSF into a commercial bank would be a deviation from the institution's original mandate.
"We can invest in commercial banking but we cannot run as a commercial bank because that is not our mandate. Our mandate is to collect and save workers' money. We only invest it on their behalf," Mr Byarugaba said.
Mr Kizito further suggested that government should allow competitors in pension services purposely to reduce NSSF monopoly. He said liberalisation of pension service would improve service delivery.
"If I had powers I would scrap off NSSF or allow private competitors. NSSF hoodwinks workers that they are saving whereas they are not. I have seen people who have worked for 20 years and their savings are less Shs100,000," Mr Kizito said.
Mr Byarugaba said introducing multiple players in the pension sector would boost competition for profit making something that is for the common good.
He cited Brazil where liberalisation of pension services was allowed and the common goal was lost since all private players aimed at profit maximisation.
"No one would bother about the future workers. Liberalisation comes with challenges like competition for profit making. Private players do not mind about common good. They are about making profits," Mr Byarugaba said.
Mr Kizito warned workers against venturing into agriculture after retirement because agriculture needs continuous funding.