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COMPETITION COMMISSION TAKES ON SACCOS

By ZWELETHU DLAMINI | 2019-12-06

THE Eswatini Association of Savings and Credit Cooperatives (ESASCCO) and its members are under investigation for prevention of competition in the market of provision of micro-lending software services to Savings and Credit Cooperatives (SACCOs).

The investigation follows a complaint sent to the commission suggesting that ESASCCO and its members entered in an agreement which has prevented competition in the supply of micro-lending software which is envisaged to replace the older versions that are currently being used by  the 40 member cooperatives.

The commission has already sent correspondences to the association and its members informing them of its investigation and requesting them to furnish it with information or evidence that has a bearing on the investigation.

“It is alleged that ESASCCO and its members who are SACCOs entered into an agreement, decision or concerted practice which has as its objects or effect, the prevention, restriction or distortion of competition to an appreciable extent in the country or substantial part of it.

 As a result of this prohibited conduct described in Section 30(1) of the Competition Act, other suppliers or competitors of the micro lending software services who supply the same or similar micro-lending software services as Mambu system have been excluded from providing micro lending software services to SACCOs,” reads part of the letter directed to the association and its affiliates.

According to the correspondence, this effectively alleges that the service providers have been fore closed in effectively competing with the Mambu system provider.

It is alleged that the service provided to the SACCOs are micro-lending software services  and the alleged conduct if proven will result in contravention of  Section 1 of the Competition Act.

The Act provides that ‘any category agreements, decisions, or concerted practices which have as their object of effect the prevention, restriction or distortion of competition to an appreciable extent in the country or in any substantial part of it are prohibited.’

“In conducting it investigation the commission may invoke its statutory powers as are necessary to bring the investigation to a successful conclusion. The commission will advise the parties accordingly at the conclusion of  its investigation whether or not any of the aforementioned allegations are proven,” further reads the letter by the Competition Commission dated November, 18, 2019.

Documents

The competition commission wants the SACCOs to furnish it with correspondences between them and their associations, minutes of meetings held in relation to the provision of micro lending software services, among other information.

The SACCOs are also expected to submit several other documents related to micro-lending software services including tender documents, cost of their provision, contacts of the administrators of the micro-lending software services.

“The commission requests your SACCO in terms of the Act, to furnish the commission with the following; previous and current providers of the micro lending software, services dating from 2016 to 2019.

All agreements or contractual documents between ESASCCO and your SACCO relating to the provision of micro lending software services; and any other information deemed relevant   to the investigation for the provision of micro lending software services,” further reads the letter.

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