Lawmakers task education board to expedite student loan recovery

The parliamentary Public Accounts Committee (PAC) has called on the Rwanda Education Board (REB) to ensure speedy recovery of students’ loans to give a chance to more Rwandans to acquire university education through the scheme. Meeting REB officials at Parliament last week, the lawmakers said the agency should set clear timelines on recovery and put more pressure on organisations employing loan defaulters. REB officials were appearing before PAC over various concerns in the institution’s operations as highlighted in the 2013/14 Auditor-General’s report. “Inform your new minister that PAC has requested that this loan recovery issue must not appear in the Auditor General’s report again,” PAC deputy chairperson Théoneste Karenzi told the officials. “You need to exert more pressure on individuals and institutions employing them. Every time you appear before this committee, you say you note our advice and are going to implement, but the issue is recurring.” Among others, the 2013/14 Auditor General’s report highlights a lack of complete database for tracking recovery of students’ loans. The three previous AG reports showed that REB does not have complete information on student loans and recovery. “In addition, many entities did not facilitate REB in the process of recovering loans from their employees, implying that REB is unable to trace beneficiaries employed within and outside the country,” reads part of the report. Grace Rwakarema, an auditor from the Office of Auditor General, said there are gaps in REB, including following up and making sure that those who cleared their outstanding dues get clearance certificates. “On the database issue, why empty promises? It is because this issue is only given attention whenever the question is raised. The Auditor General keeps insisting on this because we see no progress,” she said. REB director general Ismael Janvier Gasana, however, explained that the data base problem had been addressed. Today, he said, even though work is in progress, of the 78,000 people now known to have benefited from government bursaries for university education, the whereabouts of 46,000 are known. However, there is incomplete information on 28,000 others, while there is completely no trace of 3,600 others who are thought to have “got the loans before the Genocide, passed away, fled the country or probably changed names.” However, Gasana sounded optimistic on the list of known beneficiaries. “We compiled a list of public and private institutions and NGOs that employ these people. We issued letters to these institutions, clearly stating who owes how much and how much should be deducted every month,” Gasana said. Legal hitch However, according to Gasana, there is no law stipulating punishment for payment delays, which affects recovery process. MP Theogène Munyangeyo advised the ministry to initiate it using the contracts signed with beneficiaries. The Auditor General says there is need for REB to expedite the process of gathering information on all sponsored students and their repayments status so that the students’ loan database is updated to reflect the true picture of the unrecovered amounts. The Auditor General called for strengthening of the legal framework to ensure that employers make declarations to REB. “A strong legal framework should enable REB officials to make regular audits and follow up on recovery of SFAR loans with the employers,” said the Auditor General. In the past, REB said it had tried to put to task heads of institutions with employees who have not repaid their loans. But the MPs queried why no follow up was done. They also suggested that REB could collaborate with security agencies and telecom companies, as well as the Credit Reference Bureau, to track down and compel defaulters to pay. Gasana said after obtaining a proper database, all these options will be considered. Munyangeyo suggested that REB can come up with the ‘name and shame list’ for defaulters. “Another thing that could make people pay up is informing them that if they continue to be reluctant, there is no other choice, but to make their names public.” He faulted REB for not conducting adequate sensitisation to let the public understand the importance of the loan scheme. In the latest Auditor General’s report, concerns with tracking disbursements and recovery of student loans also include unreliable balances for beneficiaries. Cases were also noted where some of the few employers deducting and remitting the money to REB did not provide detailed schedules to show the individual employees repaying the loans. Ultimately, balances for beneficiaries are not updated to reflect all repayments made. Loans have for years been granted to students to pursue university education in the country and abroad. Most of such loans were awarded through what used to be known as Student Financing Agency of Rwanda (SFAR), which was eventually absorbed into REB. About Rwf 70bn is estimated to be unrecovered since 1980. The Rwanda Development Bank is taking over the management of the students’ loans effective the 2015/2016 academic year. editorial@newtimes.co.rw

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Lawmakers task education board to expedite student loan recovery