The Student Financing Agency for Rwanda (SFAR) has adopted a new loan repayment system to help trap likely defaulters.

The agency said the new system is aimed at consolidating loan recovery efforts at the centralised level which will see them deal directly with employers.

Emmanuel Muvunyi, the Director General of SFAR, said yesterday that the system will begin with some public institutions including the ministries of Finance and Public Service.

"We have decided to deal with such institutions. Employees who benefited from such loans should find it their obligation to pay back," he explained.

It is however not clear how recipients with jobs in other countries will pay back.

SFAR plans to deduct at least 8 per cent of gross monthly salary of every beneficiary.

About 49 institutions with such employees have agreed to make the deductions with effect from this month, and remit them to SFAR’s bank account within two weeks.

And failure to do that, both employees and their institutions will be punished in accordance with the law governing disbursement and repayment of student loans.

Muvunyi said that a total of over 7,000 loan recipients in foreign diplomatic missions, public and private institutions, local and international NGOs have been identified.

About 953 employees from 189 institutions are expected to begin repaying this month, and SFAR expects to receive a total of Frw50m from them.

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