NSFAF defaulters ignore amnesty
Four months after President Hage Geingob announced a one-year interest amnesty for Namibia Students Financial Aid Fund (NSFAF) loan recipients, there has been little uptake, with only about 1 500 loan defaulters grabbing the opportunity to pay off monies owed at a cheaper rate.
“We are aware that many NSFAF beneficiaries are finding it difficult to pay back their loans due to a scarcity of economic opportunities and other challenges. In this regard and to provide some relief, I announce the amnesty,” he said while delivering his State of Nation Address in April.
NSFAF CEO Kennedy Kandume this week said only about 1500 defaulters have taken advantage of the amnesty period since it was introduced.
“Amnesty was given by the president. Essentially, their debt has been made cheaper and we expect them to take advantage. There has been movement, but not to the extent we want,” he said while speaking on the Evening Review show on Tuesday.
Kandume said NSFAF had been in the process of dragging defaulters to court when the amnesty was announced. The fund subsequently placed its plans on hold “so that we do not jeopardy the amnesty drive since it also involves waving the interest amount”.
The amnesty will run until April 2023.
‘Entitlement syndrome’
NSFAF has approximately 95 000 matured loans, mostly comprising of the cohort funded between 1999 to 2015.
The country’s student funding body has expressed outrage at the resistance shown by former loan beneficiaries, accusing them of adopting an ‘entitlement syndrome’.
Kandume was not impressed with the thousands of beneficiaries who are gainfully employed yet disregard their responsibility to repay their loans.
The fund’s loan book currently stands at N$5.2 billion. Its poor recovery record has also piled on the pressure, with the CEO revealing that his team only recovers about N$10 million per year.
“The entitlement of Namibians is driving this reluctance [of repayment]. Most of them have this perception that because it is government money, they do not have to pay it back,” he fumed.
He admitted that the “lack of action on NSFAF’s part is also a driving factor”, adding that the fund will “become aggressive and take defaulters to court so that we can get orders to attach and auction their assets to recover the money. If you enter into loan contract, you must repay.”
N$1.6 billion a year
Internally, NSFAF has been working around the clock to improve its processes and systems, Kandume said, especially those related to communications and providing feedback to the public.
He added that the conversion of record-keeping from manual to electronic format has also made it easier to provide information to beneficiaries.
The fund needs approximately N$1.6 billion annually to meet its student funding needs, he said.
However, with its measly recovery rate, government constantly has to step in to rescue the situation.
Kandume said the ideal situation would be for NSFAF to collect enough funds to cater for its funding needs and government chipping in to cater for the shortfall.
“With our funding model, we will never recover everything, so treasury must step in. However, we have to be aggressive in coming after those who owe the fund.”
“We are aware that many NSFAF beneficiaries are finding it difficult to pay back their loans due to a scarcity of economic opportunities and other challenges. In this regard and to provide some relief, I announce the amnesty,” he said while delivering his State of Nation Address in April.
NSFAF CEO Kennedy Kandume this week said only about 1500 defaulters have taken advantage of the amnesty period since it was introduced.
“Amnesty was given by the president. Essentially, their debt has been made cheaper and we expect them to take advantage. There has been movement, but not to the extent we want,” he said while speaking on the Evening Review show on Tuesday.
Kandume said NSFAF had been in the process of dragging defaulters to court when the amnesty was announced. The fund subsequently placed its plans on hold “so that we do not jeopardy the amnesty drive since it also involves waving the interest amount”.
The amnesty will run until April 2023.
‘Entitlement syndrome’
NSFAF has approximately 95 000 matured loans, mostly comprising of the cohort funded between 1999 to 2015.
The country’s student funding body has expressed outrage at the resistance shown by former loan beneficiaries, accusing them of adopting an ‘entitlement syndrome’.
Kandume was not impressed with the thousands of beneficiaries who are gainfully employed yet disregard their responsibility to repay their loans.
The fund’s loan book currently stands at N$5.2 billion. Its poor recovery record has also piled on the pressure, with the CEO revealing that his team only recovers about N$10 million per year.
“The entitlement of Namibians is driving this reluctance [of repayment]. Most of them have this perception that because it is government money, they do not have to pay it back,” he fumed.
He admitted that the “lack of action on NSFAF’s part is also a driving factor”, adding that the fund will “become aggressive and take defaulters to court so that we can get orders to attach and auction their assets to recover the money. If you enter into loan contract, you must repay.”
N$1.6 billion a year
Internally, NSFAF has been working around the clock to improve its processes and systems, Kandume said, especially those related to communications and providing feedback to the public.
He added that the conversion of record-keeping from manual to electronic format has also made it easier to provide information to beneficiaries.
The fund needs approximately N$1.6 billion annually to meet its student funding needs, he said.
However, with its measly recovery rate, government constantly has to step in to rescue the situation.
Kandume said the ideal situation would be for NSFAF to collect enough funds to cater for its funding needs and government chipping in to cater for the shortfall.
“With our funding model, we will never recover everything, so treasury must step in. However, we have to be aggressive in coming after those who owe the fund.”
Comments
Namibian Sun
No comments have been left on this article