HIGHER Education Students' Loan Board (HESLB), is of recently all out to ensure that all loaned funds are recovered and benefit more Tanzanians.
Our Correspondent MOSES FERDINAND talked to the HESLB Assistant Director of Loan Repayment and Recovery, Mr Robert L. Kibona on the developments of tracking of loan beneficiaries and actual collection of due loans. Excerpts ...
QUESTION: What are the updates of loans repayment as at the close of the second quarter of the financial year 2012/2013?
ANSWER: Loan repayment activities have continued well particularly in tracing of loan beneficiaries and collection of loans up to the end of the year 2012. For instance, a total of 53,209 loan beneficiaries were traced up to 31st December 2012. This was 48 per cent of 110,529 loan beneficiaries whose loans were due for repayment.
The total loans recovered up to 31st December, 2012 were 28,028,130,461.97 shillings which was 59 per cent of due loan instalments of 47,576,293,021.80 shillings which would have been collected by that period.
Q: What was the target in amounts and numbers of beneficiaries during that period? To what extent was the target reached?
A: The actual loans collected for the period in question (second quarter of the 2012/2013 financial year) was 7,874,207,227.73 shillings which was 87 per cent of the targeted 9,000,000,000 shillings. Similarly, the total number of traced loan beneficiaries for the period under review was 9,263 - which was 98 per cent of the target of tracing 9,486 loan beneficiaries.
Q: How close were you to the target as compared to the previous period (quarter)?
A: Our performance in this period was quite impressive compared to the similar period last year. The loan collection target for the period under review increased by 26 per cent, as compared to loans collected during the previous period. The number of traced loan beneficiaries also increased by 32 per cent in comparison with traced loan beneficiaries during the previous period.
Q: What challenges do you face in collecting loans from beneficiaries?
A: Just like in any other operation, there are a number of challenges that hinder our operations. The specific challenges to loan collection are:- Lack of loan repayment culture: In spite of the support accorded to them many loan beneficiaries do not feel compelled to repay their loans. Lack of National Identifications that would assist to trace loan beneficiaries: In the absence of proper residential addresses, tracing of loan beneficiaries has proved to be difficult.
Therefore, National Identifications are found to be a way forward in identification/tracing of loan beneficiaries. Unemployment/Under employment: Some loan beneficiaries find it difficult to full repay their loans due to the fact that they are not employed or their earnings are so low to accommodate loan repayments.
Migration of loaned employees from one employer to another: High labour mobility/turnover pause a challenge in identification of beneficiaries and that trend disrupts flow of monthly remittances. Inadequate cooperation from some employers to fulfill their obligations as stipulated in the HESLB Act: Some employers give a cold shoulder when it comes to cooperating in ensuring that loaned employees repay the money as directed by the law.
Q: You recently released a public notice showing HESLB's intention to take legal action against loan defaulters and you actually published a few names to start with. Have you already filed the cases? What has been the response from the loan defaulters?
A: Cases have already been filed at Kisutu Resident Magistrate Court against 32 loan defaulters to begin with. Documentation and evidences are still being compiled so as to enable us file more cases. As a result of this measure, we have had loan beneficiaries coming up for modalities of repaying their due loans. For instance, as at 15th December 2012, a total of 106 loan beneficiaries had shown up to start repaying their loans following the public notice of filing cases against all loan defaulters.
Q: What is your call to all stakeholders involved in loan repayment (beneficiaries, employers, parents, politicians)? What strategies do you use to make them fully aware of why they should repay the loans on time and on the consequences of defaulting?
A: Loan beneficiaries whose loans are due for repayment are urged to liaise willingly with the board to start repaying their loans before stern legal actions and other unfavourable actions have been taken against them. Employers are also urged to fulfil their legal obligations of furnishing the board with information of employees who graduated from any Higher Learning Institutions since 1994/1995 and effecting loan deductions from the salary of loan beneficiary employees as directed by the board.
Parents and guardians are required to sensitize loan beneficiaries whom they guaranteed their higher education to repay their loans on due date. They should also be responsible by providing the board with the information of the beneficiaries for facilitation of loan repayment Other strategies for recovery of due loans are:- Liaising with strategic partners to locate loaners not honouring their repayment schedules or dropouts.
The partners include the Pension Funds, TRA, NIDA, Treasury and the National Statistics Bureau (NSB). Use of Local Government Authorities to trace loaners. Liaising with the Ministry of Home Affairs department of Migration for tracking loaners travelling abroad.
Institute inspection for employers' compliance in their premises. Enforcement of HESLB Act provisions on loan repayment. Use of Free SMS to disclose information on whereabouts of loan beneficiaries. Institute loan repayment through mobile payment systems. Publishing list of defaulters through the Credit Reference Bureau.