Africa-Press – Namibia. THE Namibia Students Financial Assistance Fund (NSFAF) will be writing off N$2,6 billion interest on N$5,2 billion owed by beneficiaries from 1 July, the institution has announced.
The interest amnesty will be until 30 June 2023. This comes after the institution vowed to go for defaulters’ assets and publish about 52 000 student loan defaulters’ names in the local newspapers after struggling for over a decade to get loan holders to pay back the money.
NSFAF acting chief executive officer Kennedy Kandume yesterday said the government is aware that many beneficiaries are finding it difficult to pay back their loans due to lack of economic opportunities and related challenges.
“To provide relief to the students, the president announced an amnesty on interest payments on NSFAF debts,” he said.
Kandume said as directed by the president, they have worked out some of the modalities for implementing the interest waiver on NSFAF loans.
“All debts will be paid up to an amount equivalent to the principal amount, to be considered as having been redeemed. This applies irrespective of whether they paid up before or during the amnesty,” he said.
The amnesty period will run from 1 July 2022 to 30 June 2023.
Kandume said the new interest will start from 1 July 2023 and will be applied in accordance with the individual debtors’ contractual obligation.
He stressed that waiving of interest does not mean the debt has been written off, as the principal amount remains due and payable.
“The waiving of interest has made NSFAF loans cheaper and more affordable. Please repay your loans, it’s the right thing to do,” he said.
LOAN RECOVERY HEADACHE
In 2019, the Ministry of Finance estimated that NSFAF beneficiaries owed the fund more than N$400 million.
The fund has over the years employed external debt collectors, who have unsuccessfully tried to recover the lost millions.
From 2008 to 2013, the students’ fund was collecting on average N$6 million per year when debt collection was done in-house. However, when it contracted external debt collectors, this amount decreased to N$4 million per year, of which about N$3,5 million a year plus a 12% commission was paid to debt collectors.
NSFAF has been targeting 130 000 former students, who have received funding from it since 1999.
The Namibian reported in 2018 that the fund has been able to recover about N$84,6 million only since it started debt collection in 1997.
Kandume said since the launch of the recovery campaign, 7 895 debtors have requested their account statements.
“Since the launch of the campaign till March 2022, we have recovered N$10,2 million and we have urged all debtors who are gainfully employed or have income to start repaying their debts,” he said.
Kandume added that the amnesty period, which is 12 months, does not cancel the litigation and publishing of names.
“We are just reorganising some details, as the amount we gave to the lawyers included the interest amount.
“We are giving the debtors time, hoping they will come forward and pay back their loans. We have not cancelled the litigation,” he said.
Some lawyers disapproved of NSFAF’s decision to publish defaulters’ names.
Windhoek-based lawyer Nafimane Halweendo says NSFAF is authorised to contact those who owe the fund money through the media, but only if it cannot trace the loan holder.
“If NSFAF says it is using the media to contact the defaulters after trying to employ all reasonable means to contact you and they could not, they can then use the media,” he said.
However, other legal practitioners have on social media said NSFAF is not allowed by law to name and shame defaulters.
Kandume said the fund is acting lawfully and is guided by the NSFAF Act, which also provides for circumstances in which defaulters are deceased.
“If someone is deceased and he or she was paying, the law has made a provision that we must not go for their assets.
“However, if that deceased person was not paying, there is also a provision which empowers the institution to go for their estate after following certain procedures,” he said.
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