Acting CEO of Namibia Students Financial Assistance Fund Kennedy Kandume said the waiving of interest on student loans does not equate to debt-forgiveness, advising students to pay off their loans.
Kandume said this yesterday after announcing that the authorisation to waive interest for a period of 12 months has been granted by the Ministry of Finance as directed by President Hage Geingob during his SONA on 6 April this year.
The modalities will take effect from 1 July 2022 to 30 June 2023 during which all accumulated interest on present and historical debts will be dropped. This relieves an amount of N$2.6 billion from NSFAF debtors.
Kandume stressed that the 100% due and payable interest on debts written off does not mean debts write-off, elaborating that “waiving of interest has certainly make NSFAF loans cheaper and more affordable.”
Additionally, NSFAF said, “all debts paid up to an amount equivalent to the principal amount, are to be considered as having been redeemed. This applies irrespective of whether paid up was before or during amnesty.”
As a principal amount of N$5.1 billion remains due and payable, Kandume encouraged all debtors with income to step forth in settling or arranging for debt payments.
“Please repay your loan, it is the right thing to do!” said the CEO.
New interest will only be applied to outstanding balance from 1 July 2023 as per the individual debtors’ contractual obligation. The temporary relief is provided in view of the fact that many NSFAF beneficiaries struggled to repay the loans due to challenges such as scarce economic opportunities.
Attempts to collect debt from beneficiaries remain a challenge as only N$44.9 million has been recovered between the 2015 and 2022 financial years.
The entity receives around N$1 billion per annum from government, with the number of students applying for funding increasing every year. Last year, over 23 000 applied, but the institution approved payments to only 16 185 applicants.
Source: All Africas
