Less than 1% of N$1.8 billion student loans recovered by NSFAF

The Namibia Students Financial Assistance Fund (NSFAF) has recovered just N$18.2 million - less than 1% of the total student debt of approximately N$1.82 billion - by the end of its 2024 financial year, the auditor general has found.This raises serious concerns about the fund’s effectiveness in loan recovery and its ability to fulfil its strategic mandate.According to auditor general Junias Kandjeke’s report on NSFAF’s finances for the year ending 31 March 2024, most student loan accounts are in arrears for several years. Worryingly, there is little to no evidence that defaulters have been contacted to address overdue payments or clarify reasons for the delays.“The fund does not have approved standard operating procedures (SOPs) or procedure manuals, despite adopting the International Public Sector Accounting Standards (IPSAS) Framework for the period 31 March 2022 to 2024,” Kandjeke said. “Some SOPs remain in draft form and have yet to be approved and adopted.”He further noted that existing SOPs were outdated, last revised in 2017, and still referenced staff who have since resigned - including the former CEO, CFO, and accountant. “These documents do not clearly outline the full process from loan initiation to recording,” he said.Consequently, Kandjeke issued a qualified audit opinion, stating: “Except for the effects of the matter described in the basis for the qualified opinion, the financial statements fairly present, in all material respects, the financial position of NSFAF for the year ended 31 March 2024, and its financial performance and cash flows, in accordance with IPSAS.”He added that all debtors meeting the definition of default had been fully provided for at year-end.“Given NSFAF’s mandate to assist students from low-income backgrounds, it tolerates a higher credit risk. Under IPSAS 41, the Fund must assess impairment of financial assets when there is a significant increase in credit risk since the initial loan approval. As 67% of loan holders have defaulted, the Fund has applied a lifetime expected credit loss model,” Kandjeke explained.This credit loss allowance factors in the exposure at default, probability of default, and loss given default.He also revealed that loans that matured between 2013 and 2017 - which make up 67% of total debt - are now non-performing. Loans issued during that period bear interest at half the prime rate, while loans issued thereafter carry an interest rate of prime minus 2%, in line with Fund policy. Interest is only charged on matured loans.In total, NSFAF was exposed to credit risk amounting to N$10.3 billion in 2024.Kandjeke further pointed out that when NSFAF became an independent secretariat, it inherited loan balances and financial obligations to continuing students whose loans were previously approved by the ministry of education. “These inherited commitments could not be measured reliably due to a lack of accurate records from the ministry,” he said.“The reported loan book includes both students who have completed their studies and those still studying. It is not an amortised balance,” he added.The fund used both quantitative and qualitative data to assess credit risk - including debtor activity, credit ratings, and the date of loan origination. Alarmingly, of more than 120,000 debtors awarded loans, only 1,400 are actively repaying.The financial statements were prepared under the assumption that the Fund will continue operating as a going concern. “This assumes the availability of funds to support future operations and the realisation of assets and settlement of liabilities under normal business conditions,” Kandjeke noted.He also confirmed that Cabinet had resolved in 2021 to re-integrate NSFAF into government, and that a reintegration framework and timeline had been approved. Education Minister Sanet Steenkamp confirmed last week that NSFAF is expected to be fully re-integrated into government by October this year.“Upon reintegration, NSFAF will cease to exist as a statutory entity, and its functions will be absorbed into [government].”The process does not affect the fund’s going concern status as at 31 March 2024, Kandjeke concluded.

Less than 1% of N$1.8 billion student loans recovered by NSFAF

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Namibian Sun 2026-07-23

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Less than 1% of N$1.8 billion student loans recovered by NSFAF

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Namibian Sun 2026-07-23

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