Wednesday, 29 August 2018

$1 BILLION LOAN FACILITY : PAYSLIPS DEMAND FRUSTRATES STUDENTS

HIGHER and tertiary education students have raised concern over the collateral security demanded by banks for them to benefit under the $1 billion loan facility availed by Government early this year.
The educational loan facility availed by the ministry and the Reserve Bank of Zimbabwe at ZB, NMB, POSB, CBZ, Eduloan and Getbucks was meant to help students who are struggling to pay fees.

The institutions demand a guarantor with a payslip but some students do not have parents or guardians who are employed.

Alternatively, the banks want the universities or colleges to be guarantors for their students.
The tertiary institutions are reluctant to assist students due to high interest rates of up to 10 percent as they will have to bear the costs in case of default.

Due to the economic situation in the country, most students are struggling to pay their fees resulting in some deferring studies.

Zimbabwe Congress of Students Unions (Zicosu) president Takudzwa Gambiza said while the loans were now available, some students were facing challenges in accessing them.
He said the challenge that students are facing is that of the requirements for one to qualify for the loans and the high interest rates.
“The requirements are somehow rigid and stringent, especially on the issue of collateral security, which the banks and micro-finance institutions require. Students fail to have guarantors and some of their parents are not formally employed hence they do not have pay slips to produce,” said Gambiza.
He said some institutions which should assume the role of guarantor are hesitant to comply with Government’s directive.

“I know that the Government had said in cases where students fail to get guarantors, the institutions were supposed to stand in as guarantors. However, this is a challenge because the loans have high interest rates and if a student decides to drop out, it is the institution that will have to pay the loan with the interest,” he said.

Gambiza said the loan facility, unlike the cadetship, has high interest rates, with some microfinance banks charging up to 10 percent.

“In that regard, we have appealed to the Government to address the issue. Soon we will be writing to the President’s office to meet him and all relevant ministries so that we can address the issue. Our appeal is to have easy access to the loans and not something that fails to manifest on the ground,” said the Zicosu president.

He said the meeting will address other issues that affect students such as their welfare.
Recently, Higher and Tertiary Education, Science and Technology Development Minister Professor Amon Murwira confirmed that interest rates by local banks were exorbitant.

He said Government has secured a $10 million loan facility from a South African financial institution to assist tertiary education students pay their fees, a competitor with lower rates so as to push local ones to lower their rates.

Professor Murwira said more than 10 000 students in tertiary institutions countrywide were paying their fees through loan facilities.

Meanwhile, students expressed gratitude towards the Government for slashing fees for learners on attachment.

The Ministry reduced the payment of tuition fees by students on industrial attachment or teaching practice to 60 percent of tuition fees.

Previously students on attachment were required to pay full fees.
The Ministry said all institutions that had not adhered to the policy were mandated to do so with immediate effect. Chronicle

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