Tanzania: Loan Board Set to Publish Names of Chronic Loan Defaulters in January

The Education Students' Loans Board (HESLB) will effective early January start publishing names and pictures of chronic defaulters who graduated in the last ten years.

HESLB is also forming a task force that will comprise of members from the loans board and other stakeholders, which will seek out employers who do not deduct or remit money deducted from graduate salaries to face the law.

Addressing journalists yesterday in Dar es Salaam, HESLB Executive Director, Mr Abdul-Razaq Badru, said the loans board had issued a 30-day notice to 142,470 former students to pay loans amounting to 239.3 billion/- or face justice.

"We had issued a four-week notice when it expired; we added two more weeks, which expire at the end of this month. We will now move on to take legal measure against the defaulters that will include publishing their names alongside their pictures," he explained.

Mr Badru said the list of names alongside pictures of the defaulters will also be placed in different database so they can easily be identified. "We are finalising legal procedures that will be taken against them and we also said that they will be forced to pay all expenses used in seeking them," the ED stated. Mr Badru said out of the more than 100,000 former students given the notice about 42,700 went to the HESLB offices and paid.

"Some of them paid the whole amount and some entered into special agreement to clear the amount that they owe the loans board. He explained that previously they used to collect about 2bn/- per month but the amount has increased and by November, this year, they collected 8bn/- per month.

Speaking on the special task force, Mr Badru called on employers who have not been making any deductions or remitting the deductions to do so within the next two weeks before the task force starts executing its duties.

"Legal measures, including paying a fine or imprisonment, will be taken against employers who are not making any deductions, deducting a small amount or not making any remittances from graduates who received education loans from the board," he explained.

Expounding on the legal punishment, Acting HESLB Assistant Director of Legal Affairs, Mr Luhano Lupogo, said the punishment will include 36-month imprisonment or a fine that equals the amount the employer was supposed to deduct and remit to the loans board.

Mr Badru said the amended HESLB Act No. 9 of 2004 has increased the amount to be deducted from graduate salaries from 8 per cent to 15 per cent and also increased the grace period from 12 months to 24 months."I think all stakeholders who contributed opinions and ideas to the amendments include Members of Parliament (MPs).

We had initially proposed an increase of 30 per cent from the 8 per cent, but we settled for 15 per cent as proposed by stakeholders," he noted. According to Mr Badru, the amount of mature loans to be paid to HESLB is 300bn/- out of which 140bn/- has already been collected.

The list of beneficiaries who have not paid loans includes those who took loans between 1994/95 and 2005 when the then Ministry of Higher Education was charged with the role of issuing loans to students.

When HESLB started operations in 2005, it took over the responsibility of pursuing payment of loans amounting to 51.1bn/- that had been issued by the ministry to 48,378 students. By June 2016, a total of 379,179 Tanzanians had benefited from HESLB loans since the board's establishment in June 1994.

The amount issued to these beneficiaries has reached 2.6 trillion/-, according to Mr Badru. A total of 238,430 former students were supposed to have started repaying their loans after the expiry of the grace period, amounting to 1.4 trillion/-.

Some of these loans are being repaid and others are not because beneficiaries or their employers have not yet come forward to commit themselves.