Rwanda Education Board (REB) could give up on recovering some billions of francs in student loans after failing to trace 3,635 beneficiaries.
REB director-general Ismael Janvier Gasana told The New Times, last week, that most of the untraceable defaulters are those who benefited from student loans scheme from 1984 to 1994.
Authorities speculate that the beneficiaries could include victims of the 1994 Genocide against Tutsi, those who fled the country and others who have been committed to prison either in the country or abroad.
“As REB hands over the task of recovering student loans to Development Bank of Rwanda (BRD), we advise the government to give up on some loans for better planning. It is not good counting on bad debts,” he said.
“In accounting, if a debt exceeds five years without hope to recover it, it is removed from recovery system to facilitate planning.”
A new law governing university study loan was gazetted on September 15.
Unline in the past when government disbursed the funds directly to the beneficiaries, under the new legal framework, a financial institution (currently BRD) will manage the fund, while measures have been taken to ensure that beneficiaries who have completed their education pay back their loans upon getting jobs.
Gasana said REB has so far recovered Rwf9 billion out of Rwf70 billion that was expected from 78,212 beneficiaries.
A task of recovering more than Rwf55 billion awaits BRD if only the bad debts are written off.
“Information about the unrecoverable amount of money is unavailable because that is among the missing data. Some beneficiaries studied two years, others four and five years. Some of them were receiving Rwf7,000 per month, while others later received Rwf11,000 per month,” he said.
Gasana noted that clean data has since been found for 46,531 beneficiaries and some of them have started repaying loans.
“We have also traced 28,046 beneficiaries whose data are not clean as we continue to complete data,” he said.
According to Gasana, having someone’s clean data means to have their clear identification, the period they received the loan, the amount received and their current employers.
“These data will help BRD to easily recover loans and the recently gazetted law on student loans and bursaries empowers the financial institution to carry out the recovery,” he said.
Article 21 of the law on student loans and bursaries stipulates that a loan recipient may be exempted from repaying due to death or permanent disability upon approval by competent organs.
Article 9 states that the source of the funds will be the state budget, funds repaid by loan recipients, donations, grants and bequests.
Under the legislation, students studying in the county may request for loans in the financial institution mandated by the government to pay for their tuition fees, welfare fees, or research fees.
Rwandan students studying abroad may also request for loans in the financial institution to cover for their tuition, welfare costs, research fees, transport fees, and medical costs.