Legislators on the Committee of Commissions Statutory Authorities and State Enterprises (COSASE) have told the management of Higher Education Students’ Financing Board (HESFB) prioritise recovery of the student loans.
The MPs raised issue with HESFB’s lack of a comprehensive and streamlined process of recovering student loans and the high probability of HESFB failing to recover the funds from defaulters.
Hon. Yusuf Nsibambi (FDC, Mawokota South County) said that HEFSB should not pamper the students who take out the loans because the funds must be recovered for others to use.
He said that it is their prerogative to choose to take a loan and therefore, should be ready to pay back or deal with the consequences on defaulting.
“These loans are not compassionate or soft loans. We need a sustainable and reliable system of recovery, and I am not convinced that HESFB has one,” Nsibambi said.
yadondo East MP, Hon. Muwada Nkunyinji proposed that as part of the recovery, beneficiaries of the student loans should offer a service to the country at partial pay with the rest of their earning being paid back on the loans.
He urged that HESFB must display efforts to recover all the money borrowed because it is sourced from taxpayers and should be treated preciously.
The Deputy Chairperson of the Committee, Hon. Lucy Akello added that a few measures could be created to recover the loans and gave an example of Kenya which requires one to get a certificate of clearance from the loans board before standing for elective politics or assuming a leadership position.
Christopher Birungi, the Director of Finance and Administration at HESFB said that the loans they issue are insured with one per cent loan protection fee paid per year by each student.
Birungi added that money collected as the loan protection fee is put in a risk-free investment that is specifically in a fixed deposit in Centenary Bank.
He said that the loan repayment has a time frame of five to 11 years depending on the programme.
Birungi noted that they work with the Federation of Uganda Employers and the Credit Reference Bureau to ensure loan repayments from employers of the students with loans.
He added that HESFB is currently engaging the Education Service Commission to give priority employment to students who have trained to be teachers under the loan scheme.
