The Inspirer staff
The Development Bank of Rwanda (BRD) has said it has been developing and online system dubbed “Education Finance Management Information System (EFMIS) intended to improve the efficiency of student loan repayment and recovery.
The system, will streamline the management of data for student loans and bursaries.
The development of the data management application is now in an advanced stage of completion, according to an official in charge of education financing at the bank.
It was expected to be in place by the end of March this year (2018), but, BRD said it has it is still in the final phase of testing.
“So far, we are conducting data migration exercise. After that process, the system will support the process of generating bills (loan repayment schedules) and streamline database management. Before the system, student loan recovery has been handled in a manual way. The system brings all the advantages of a digitised database management practices,” he said.
BRD stated that Funds amounting to Rwf70 billion that the government spent on financing students’ education from the 1980 to 2015 students is recoverable over a 10-year period.
The recovery, however, BRD says, depends on gross salary of a loan beneficiary, which results in some loan beneficiaries being able to pay their loan in a shorter period and others in a longer period.
The number of beneficiaries who should pay back are 67,914, while the number of beneficiaries who have already finished to settle the loan are around 4,075.
Collections made from January 2016 to date are over Rwf4.8 billion.
However, there are loan recovery challenges especially arising from inability to identify all the beneficiaries. currently, the Bank’s database can only identify 13, 000 graduates who got funding from the scheme, which BRD CEO, Eric Rutabana dreemed few compared to all the beneficiaries and the amount of money in arrears, during a recent press conference.
“So far, we have obtained data from Rwanda Education Board on loan beneficiaries of 1980-2015. There is still more collaboration to have an exhaustive and more accurate list. It is work in progress. Now we shall also work with the Higher Education Council on issues of students’ loans management,” said Fred Mugisha, Senior Manager at BRD Education Financing Department.
The mechanisms that BRD has been using to recover the due funds include getting and cleaning data on loan beneficiaries and creating a database in that regard; collaboration with employers through regular reminders on their role in student loan recovery, and field visits to identify loan beneficiaries (to get their addresses and contact details).
Sustaining student loan scheme
Other means for the repayment include sending monthly loan deduction schedules to employers indicating their employees that have to service student loans; enhanced public awareness on students’ loan recovery.
The Chairperson of the Rwanda Civil Society Platform, Jean Léonard Sekanyange said that the loan repayment is necessary as it can help sustain the government’s education financing for students especially those from the economically vulnerable families, but, pointed out that more efforts are needed to fill the gaps still existing in the process, pointing out that it is difficult that a borrower pays back a loan when the creditor does not reminds them to do so.
“If the government supported you to study, and you were lucky to get a job, you should pay off the money so that many Rwandans be able to study,” he said.
However, he voice concerns that though employers are told to deduct money from the remunerations of workers who benefited from the scheme, some employees tend to lie their bosses as a trick not to clear the loan.
“There should be a system that can make an exhaustive list of all the beneficiaries of the scheme so that any employee who takes on workers can know whether their name is on the list so that they start discounting the due money.
In addition, he said, beneficiary can pay the entire dues at once when they have got means instead of undergoing monthly salary discounts to pay off the loan in installments.
Pointing to the need for technology in the recovery process, he said that ICT advancement has enabled electronic financial management or transactions, pushing for the establishment of an online system that can allow people to know how much they have paid, how much they still owe, or whether they have settled the entire loan.
This move, he said, will address the issue of ambiguity about whether one has cleared the loan, or not.