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OPINION: NSSF BUSINESS CREDIT RATING IS AGGRANDIZING IN COVID-19 A HEAD OF THEIR ANNUAL GENERAL MEETING

By Ben Sebuguzi

NSSF increased the interest rate paid to its members from 3% to 7% for Financial Year 2009/2010 yet the GDP of the economy that time grew and reached an all the time high of 11.70 percent in the second quarter of 2009 with an average growth rate of the same year of 8.07%.

Dr . Richard Byarugaba, the MD of NSSF, while announcing the coming Annual General Meeting with the press, he announced the good news of 8.2% interest payments to members. This single-digit figure of return on investment for NSSF savers is so high and highly commended, compared to 2009/10 when our economy was very buoyant.

We should put the fact that covid 19 has had devastating effect on the global business where our Gdp growth rate has declined to 3.6% against the estimated 5%.This resilience and commitment of the management and the board to steer the company through this very uncertain period is a clear indicator that; first and foremost, NSSF have their customers at heart. They work around the clock to deliver to their mandate of giving dividend and growing the savers funds against all odds.

This fabulous performance amidst high uncertainty also means that NSSF Uganda is the best in East Africa in credit rating probably with an estimated rating of AA+ due to their healthy financial systems and balance sheet in tough economic shocks.

This credit rating is good for not only NSSF but also the entire sector of Retirement benefits as it is a catalyst to attract more savers hence improving the welfare of workers in Uganda. Why it is good to rate companies like NSSF?A business’s credit rating reviews the company’s transaction history. Such a rating is good to measure the level of financial risk of the business to a lender and the probability of the business defaulting on the loan and savings of customers.

The information used to create a rating is gathered from companies with which the business has had financial relationships, such as suppliers or other lenders. Additional data can be included from corporate finance reports, business filings, or lawsuits, as well as liens and judgments filed against the company. Among the primary determining factors of a business’s credit report is how prompt the business is in meeting its payment obligations, such as paying suppliers, repaying loans, and paying monthly leases and bills.

Does it pay on time, or is it late with payments? What is the structure of the company’s debt? Are loans secured or unsecured? How much debt is the business carrying? Along with the payment history, strong consideration is also given to cash flow, the financial resources of the company, working capital, and net worth. The fiscal information, however, is not considered in a vacuum.

The business profile is also factored in, including the business’s size, history, and reputation, along with the background of the principals and company stock, number of employees, and structure of the business. By factoring in the business profile, the rating will also reflect the size and scope of the business.

All these factors are included in a mathematical formula that comes up with a credit rating. With the efficient modern IT systems and numerous innovations at NSSF, it means that the company can be trusted highly as the future is bright.

Ben Ssebuguzi, is a budding economist, entrepreneur and Secretary General, Uganda Poor youth Movement.

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