The Effectiveness Of The Namibian Student Financial Assistance Fund In Recovering Loans

ABSTRACT

The aim of this research was to determine the effectiveness of the Namibian Student Financial Assistance Fund (NSFAF) in recovering loans. The Namibia Student Financial Assistance Fund (NSFAF) is a scheme designed to replace the Public Service Bursary The scheme, whose purpose was to sponsor students so that they would be bonded to work solely in the Civil Service. Soon after Independence, the demand for recruits in the Civil Service was significantly decreased, following the integration of the various ethnic-based administrations into one national Government. Consequently, the Public Service Bursary Scheme lost its relevance. However, the demand for financial assistance by students tremendously increased. This led the Government to replace the Bursary Scheme with the NSFAF, allowing the Government to continue addressing the human resources needs of the country in general as well as the needs of the Public Service. The Fund became operative when Parliament passed the Namibia Student Financial Assistance Fund (NSFAF) Act in 2000 and was effective from January 1997. The Act requires the student to repay the loan advanced plus interest at half the prime rate in instalments of at least15% of gross annual income minus tax and pension contribution. The maximum period for repayment must not exceed three times the number of years for which the student received the loan. A mixed-methods approach was used for it allowed the researcher to use both aspects of the qualitative and the quantitative methodological approaches. This study adopted the case study research design enabling the researcher to carry out an in- depth study of the problem under investigation. The researcher used questionnaires as the research instrument. To successfully carry out the research, both desk and field research ii was applied. The questionnaire and interviews gathered to collect primary data. Questionnaires were distributed physically to past and present beneficiaries of the NSFAF. Secondary data was collected from relevant literature like journals, reports, documentary analysis, books, magazines and newspaper articles. The majority of the former beneficiaries have not paid back the loans because among other reasons, the salary they receive is not enough to repay and still be able to take care of their families and because some are unemployed. Conclusion have also been drawn from the table that shows how much was recovered and how much the fund intended to recovered for the period. Therefore conclusion can be drawn that the main findings of the study is that the NSFAF is not recovering loans effectively. The fund could also not recover loans due to irretraceable candidates and missing information. From the findings of the research, it was concluded that the NSFAF is not recovering loans successfully. The study recommended for the NSFAF to be mandated to black-list defaulters, to have access to the Inland Revenue Office and SSC for tracing purposes. It further recommended for the NSFAF to garnish defaulters' salaries. The researcher strongly recommends for the fund to keep a proper record of loan beneficiaries for future use in recovering loans. The loans department of the NSFAF should also be strengthened and staff should be well trained to undertake this activity in the absence of the agency doing the tracing. It is further recommended that with the new knowledge the policy for NSFAF should be reviewed in order to effectively reach the fund desired outcome.