NSFAF loans to stay loans

07 May 2019 | Education

The Namibia Students Financial Assistance Fund (NSFAF) has ruled out the possibility of converting the loans it has awarded to students since its inception, into grants.

NSFAF's interim CEO Kennedy Kandume, in an interview with Nampa, explained that the fund's current funding model is not sustainable, especially at a time when it is on the verge of becoming a full-fledged revolving fund. This means NSFAF has to recuperate monies it paid to students upon completion of their studies.

“I don't foresee us converting loans into grants. It is clear that we have to be a revolving fund,” Kandume said. In 2015, President Hage Geingob called on government to move away from the study loan system, saying it should instead be converted into a system of grants.

This, the president said, would enable students to immediately build up wealth portfolios instead of graduating into debt upon completing their studies. Kandume further noted that the student fund has deployed a robust approach to recover money disbursed to students, which will then be used to aid future loan recipients.

This will make NSFAF self-reliant, unlike the current situation where it finds itself depending on government. “We will soon send out electronic statements to debtors and subsequently blacklist non-responding debtors in accordance with the debt management process,” he cautioned.

Confident in their new approach, he added that they anticipate an increased recovery from the current N$4 million to N$10 million in the current financial year.

Over the next five years, NSFAF wants to recover at least N$120 million. Over the past eight years, the student fund disbursed N$5.8 billion in the form of loans, grants and scholarships.

Kandume also said NSFAF is exploring other means to sustain itself such as the introduction of a special levy, something similar to that of the Namibia Training Authority that will be targeted at bankrolling the fund.

NAMPA

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