Museveni advises Muslims on PDM funds, injects Shs200m in Islamic Sacco

Kampala, (UG):- President Museveni has advised Muslims that Shs100million annually given to each parish under the government’s Parish Development Model (PDM) program is free from interests or profits, and therefore they are free to use it without fear of contravening the Islamic teachings against Riba.

The President who was responding to complaints raised by the Taqwa Islamic Sacco, emphasized that PDM funds are not loans to the Parish Saccos but a grant given by the government for community development.

“In my humble view, there is no Riba [interests] in PDM. Why? This is not a loan by Government to the Parish Sacco, it is a grant [and] once the money is “ours” in the Sacco, we face the problem of inflation [in that] when I buy my favorite mug of coffee at Shs20, 000, this year, I may be unable to buy the same cup next year because of the change of prices,” the 79-year-old Uganda leader stated in his letter dated Monday, March 04 to the SACCO Chairperson Ms Hafwa Nalumansi.

“Therefore, when the Sacco puts a percentage of let us say 5 per cent on the Shs1million after 24 months on the money it gives to one of the Sacco members, it is to maintain the stability of the Shs20,000 being able to buy me the same mug next calendar year like it did this year.”

Mr Museveni further explained that the “small interest” percentage is not meant to profit from the grant but to keep the program afloat amidst inflation challenges. He also elaborated that “small interests” are meant to enable Saccos to generate operational funds to buy materials like papers needed for the transactions.

 “If the parish Sacco managers pay [operational costs] from the Shs1million, the fund will decrease [and] the government will have to add more money,” H.E Museveni stated.

Whilst observing that the Islamic teaching is against the huge and unfair interests levied by money lenders, Mr Museveni said; “Money lenders have been demanding, I hear, 3 per cent per month Riba [interests]. This is 36 per cent per year. This means that if I take Shs1million, after a year, I will pay Shs1,360,000,” he said

“In the PDM case, if the percentage is 10, I will pay Shs1,100,000 after two years on our own money at the Parish. Why? Not in order to give anybody or any company profit [but] simply to maintain the value of our money,” he added before extending Shs200 million as support to the Taqwa Islamic Sacco.