Leonard Ncube, Victoria Falls Reporter
THE Ministry of Higher and Tertiary Education, Science and Technology Development has signed a $10 million student loan fund with a South African company that will provide loans to tertiary students at low interest rates.
The move comes after an outcry by students that another loan facility of $1 billion which was availed earlier by the Government was prohibitive to most students as banks were requiring them to be guaranteed by parents with payslips. At the same time, tertiary institutions are also reluctant to guarantee those students whose parents are not formally employed. The students had also raised concern over the collateral security demanded by the financial institutions and the interest rates of up to 10 percent on the loan.
In an interview on the sidelines of a Higher Education Partnerships in Sub-Saharan Africa (HEPSSA) symposium dubbed Higher Education Partnerships in Sub-Saharan Africa (HEPSSA) and Joint Enriching Engineering Education Programme (EEEP) held in Victoria Falls last week, Higher and Tertiary Education, Science and Technology Development Minister Professor Amon Murwira said the Government had to come with an alternative after the complaints.
“In order to counteract this, we have to do it commercially. We have been in discussion with Fundi of South Africa which has a subsidiary Eduloan and we have signed a deal of $10 million. They have lower interest rates and what we are doing is to try and tell the banks to say here is another person with lower rates and we hope they will lower theirs too,” he said.
Prof Murwira said the Government was now working on how the money will be dispersed through Eduloan. He said one of the mechanisms could be a cadetship where students can repay Government once they get employed after finishing their studies.
“We are also trying to move on a buffer mechanism whereby Government can guarantee students who can’t meet conditions of payslips because we are sure that as they finish they will be able get a job and pay back the money as the economy grows very fast.”
Prof Murwira said more than 10 000 students are already on Eduloan facility and the new loans would be just an extension.
He said Government is working hard to transform higher and tertiary education in the country with the aim of narrowing the skills gap. The symposium was jointly organised by the National University of Science and Technology (Nust) and University of Botswana through funding from the Royal Academy of Engineering (UK).