Dar Es Salaam — DESPITE many challenges facing loans repayment and recovery exercise, the Higher Education Students Loans Board (HESLB) has managed to identify more than 56,000 loan beneficiaries. Out of these, the HESLB has managed to track down 24, 000 graduates. More than 10, 000 graduates out of those traced are repaying the loans already.

The Loan Repayment and Recovery Director, Mr Juma Chagonja said so far the HESLB has managed to recover more than 3.7bn/- from graduates, instead of the 15.5bn/- which would have been the amount recovered to date if the graduates were paying as stipulated. Mr Chagonja noted that in total the amount to be recovered since the loans were disbursed in 1994 to 2008/09 financial year stands at 80.96bn/-.

"Those who are repaying the loans are doing so in installments for a period of ten years," Mr Chagonja explained. Only 51 graduates have managed to clear their loans already, he said calling on the other beneficiaries to adhere to loan conditions and contract signed between them and the board. Although loans repayment exercise is going on well Mr Chagonja explains that the HESLB is facing a number of challenges, including lack of cooperation from employers.

More than 14, 000 students traced have not started repayment process because their employers have not started deducting their salaries. Over 32,000 other graduates are still being traced by the board, he added. Because of this, the HELSB has instituted a ten per cent

penalty for those defaulting on the loans received between 1994 and 2008/09, whom according to the agreement are supposed to have started repaying their debts. Mr Chagonja said after end of July this year all defaulters will be charged an additional ten per cent on the outstanding amount.

"Last year we had put a five per cent penalty charge and now we have added another five per cent, so those who will come after July, will be required to pay a ten per cent interest," Mr Chagonja noted. The Assistant director of Loan repayment, Mr Robert Kibona said that last year the board instituted a number of measures to ensure previous challenges associated with loan recovery did not recur. The measures include issuing a statement detailing the amount the student owes the loans facility during a graduation ceremony as well as getting updated details of the students for tracking purposes.

"This sought to ensure the students leave the campus knowing how much they are supposed to pay to the loan board as well as getting updated data on the student so we can easily trace them," Mr Kibona noted. Mr Kibona noted that the loan board was owed over 80.96bn/- since 1994. Out of the said amount, the facility was supposed to have collected 15.5bn/- by now, but only 3.7bn/- has so far been collected. For loans beneficiaries studying and living abroad, the Loans Board plans to enlist the assistance of the Diaspora section at the Ministry of Foreign Affairs and International Cooperation, to trace them.

"We believe the Diaspora section will be of assistance in tracing loans beneficiaries studying and living abroad," Mr Chagonja noted. The loans board repayment bosses cited a number of reasons for students failure to repay the loans, including unemployment, lack of cooperation from employees, deaths and the misconception that the loans was a grant. Mr Kibona noted that if there were laws requiring employers to deduct the amount and send it directly to the loans board, as is the case with pension deductions and other taxes, the loans board would not be facing an uphill in recovery of the loans.

"It would have been easier if the employers were deducting the amount directly, but since there is no law binding them to do this, we cannot force them to do so," he explained. In tracing the loans beneficiaries, the HELSB relies on staff lists from employers, as well as pension funds which is then cross checked with loans board database to identify the loans beneficiaries. Mr Chagonja noted that National Identification Cards would have made it easier to trace loans beneficiaries, "but because we don't have them yet, we have to use all means to trace them." He said.

Why is it that loans beneficiaries are not willing to pay back what they owe the loans board? Mr Chagonja explained that many thought it was a grant from government. "Many Tanzanians do not have the culture of paying back education or other loan, this is a cry not only from us, but also from other financial institutions across the country," he added. He noted that unemployment and low salaries were among reason that make many graduates fail to re-pay the loans.

For those who have passed away, he said, the law establishing the Loans Board requires their debts be annulled. The essence of establishing the Loans Board, Mr Kibona explained, was to allow money circulation with students repaying their loans while others collected money for education. In this way, many Tanzanian student will be able to benefit from this facility and advance their educational career.

"If loan repayments were done properly, there would be no need for the government to dish out more funds, and many more students would have been covered," he added stressing that the loans board will continue to sensitizing the public on the importance of paying back the loans. Established under the 2004 Act No. 9, the HESLB is empowered to recover all loans taken since 1994 to facilitate disbursement to other needy students.

Section 9 of the Act, stipulates that loan beneficiaries who fail to repay the loan, without good course, shall be liable to civil proceedings. Mr Kibona said the HESLB is also in the process of liaising with financial institutions in the country in a move that might see loan defaulters barred from accessing credit facilities from other financial institutions. Early this month while promising to address students' loan problems, President Jakaya Kikwete noted that the government was strategizing on ways to recover some 738bn/- from previous borrowers.

Most of the borrowers, he said, were now in employment, noting that recovering merely half of the money would be sufficient to loan out to all needy students in universities across

the country. On students loan related problems, President Kikwete said as a short term measure, there will be quarterly allocation and rein fencing of student's loan to ensure that money was readily available to facilitate smooth learning at universities.

The government is working out a fund raising system that will ensure readily availability of money to lend out to interested students, regardless of one's financial position," President

Kikwete told students from Dodoma-based higher learning institutions. The president defended the students' loan system as good and inevitable though he faulted its execution, particularly identification of needy students.

Commenting on the newly created online Registration, HESLB Assistant Director, Information, Education and Communication, Mr Cosmas Mwaisobwa noted that the system will curb iquestions of double registration, which leads to delays during disbursement of loans. "This is a good move and we believe will help do away with delays of disbursing loans to students, which were caused mainly by student's admission to more than one university," Mr. Mwaisobwa explained.