Govt sets interest rates for student loans
THE Government has set interest rates for student tertiary educational loans that it availed recently through six financial institutions.
In a statement, the Ministry of Higher and Tertiary Education, Science and Technology Development said the financial institutions administering the fund will not charge more than 10 percent per annum while microfinancing institutions will charge up to two percent per month.
“The participating banking institutions will charge an all-inclusive interest rate not exceeding 10 percent per annum, while participating micro-financing institutions will charge up to two-percent per month,” reads the statement.
Government said the interest accrual per annum would start from the date of loan disbursement. The lending institutions will be required to pay the fees directly into the tertiary institution’s account. However, the facility will not cover foreign students attending Zimbabwe universities or Zimbabwean students undertaking certificate, diploma or degree programmes offered by foreign colleges or universities.
Students who have received full Government or other scholarship are also exempted from getting funding under the facility. More-so, beneficiaries are not allowed to access multiple loans through different lending institutions under the facility. The Government said the monitoring of loans would be done by the lending institutions and were accountable for the manner in which funds were utilised.
“The Reserve Bank of Zimbabwe (RBZ) will also carry out periodic off-site and onsite monitoring to check whether administering institutions are abiding by the rules of the Facility. Where the borrowers under the facility abuse the funds the full amount will become immediately due and payable,” said the government.
The objective of the loan facility is meant to assist current and prospective students who do not have the requisite financial resources to support their college or university education.
Last year, Professor Jonathan Moyo told delegates at the Zanu-PF Annual National People’s Conference in Masvingo that the loan facility was part of a raft of measures by the ministry to ensure that universities were relevant to national policy.
He said after extensive consultations, his ministry had concluded that Zimbabwe’s quest for industrialisation and modernisation could not be achieved without a new human capital base driven by technological and engineering skills across the economy in the private and public sectors.
In 2006 student grants were discontinued due to cash flow challenges and were replaced by the cadetship programme in 2010. However, the latter did not yield desired results as it was also dogged by funding challenges and failed to pay fees for hundreds of students leading to some learners failing to sit for examinations. The educational loan facility will be administered by financial institutions such as ZB, POSB, CBZ, Get Bucks, EduLoan and NMB.