NSFAF debt recovery plan gains momentum

The Namibia Student Financial Assistance Fund (NSFAF) is seeking the services of a debt recovery company, as part of its efforts to recover the hundreds of millions of dollars it is owed by 15 000 loan payment defaulters. In October last year the Parliamentary Standing Committee on Public Accounts questioned why the NSFAF, which was established in 1997, had failed to trace students who had run up bad debt totalling over N$300 million from 2008 to 2011. The standing committee urged that drastic measures be undertaken to improve their debt collection performance. The NSFAF has now invited companies to tender for the provision of a debt recovery service. The tender opened on January 20 and closes on March 3. The debt recovery service will enable the NSFAF to trace loan recipients who have disappeared and failed to honour their agreements, including by submitting false addresses and references. The NSFAF will also impose stricter conditions for prospective loan applicants. At last year’s standing committee hearing Ministry of Education Permanent Secretary Alfred Ilukena said there was timeframe in place which stated when a beneficiary should begin repaying their NSFAF loan. He added that many of those traced by the NSFAF had failed to repay their loans because of they were earning low salaries. In the 2007/2008 financial year, 9 315 students failed to repay their loans, while in 2009/2010 more than 12 000 debtors were not honouring the agreements to pay. For the 2010/11 financial year, the NSFAF received close to N$225 million from the national budget and overspent by N$45 million. Auditor-General Junias Kandjeke’s most recent performance audit had established that the NSFAF is inconsistent in its application processes and that its computer system constantly crashes, leading to the loss of captured application forms and debtors' files. This resulted in the massive loopholes being exploited by former students to escape the repayment of their loans. Ilukena said at the time that the Office of the Attorney-General had also failed to trace about 4 000 defaulters the NSFAF had wanted it to track down. The NSFAF was established with the objective to provide financial assistance to students studying or doing research at approved institutions of higher education. WINDHOEK FAITH SANKWASA