Former Namibia Students Financial Assistance Fund (NSFAF) beneficiaries owe the Fund a cumulative N$9 billion since inception.
The high student debt is attributed to over 132,000 beneficiaries who defaulted the Fund since its establishment. NSFAF’s acting Chief Executive Officer Kennedy Kandume on Tuesday revealed that only N$3.6 billion of the total amount is recoverable amid indications that some of the defaulting beneficiaries have died.
“We are still cleaning out the information and N$9 billion is for everybody who benefited in the form of a loan. A Lot of money has been spent, approximately N$20 million and this amount is not what we are referring to in terms of recovery but solely those who got loans and need to repay them,” he said.
Kandume added that there was a time when the institution was awarding grants that accounted for nearly 40% of the funding, but that was changed through reform in order for the fund to remain sustainable.
“We developed a sustainability model at one point and presented it to the line Ministry as well as Treasury… but it all boils down to recovery in order to get what is needed. To be quite frank, I do not believe the current reliance on government is sustainable. There are models out there, like some other African countries who have agencies and have over 50% recovery rate,” he said.
Kandume added that the fund cannot aim for a 100% recovery rate because this would result in commercialisation, which would put additional pressure on those who have not completed their education/training.
“One cannot have it 100% as this commercialises it fully and people would need to start payments before they even attain employment thus if we can get something from those who benefited once then it would contribute to sustainability, which is a combination of recovery and government contribution,” he explained.
Meanwhile, the Fund was allocated N$1.6 billion this year, and is projecting 17,000 new enrolments.
However, Kandume noted that the money is insufficient to meet the Fund’s needs.
“If anything, the government always comes in to ensure that those who do qualify, do get,” he said.
This comes as NSFAF is planning to garnish bank accounts of 88,640 economically active debtors who owe the Fund N$4,215 billion.
The Fund has commenced with litigation and blacklisting loan beneficiaries who are economically active but failing to service their study loans after its amnesty did not yield any positive results.
The amnesty period that was proclaimed between 1 July 2022 and 30 June 2023, resulted in N$2.6 billion in interest being totally waived, and had no beneficial outcomes for the Fund, with no rise in defaulter turnout.
