RBZ engages banks over students loans
Auxilia Katongomara, Chronicle Reporter
THE Reserve Bank has begun engaging financial institutions willing to partner the apex bank for the financing of the tuition loan scheme for higher and tertiary education students.
The central bank in the January 2017 Monetary Policy Statement announced that students in higher and tertiary education institutions will as from August start getting educational loans to assist parents and guardians who are struggling to pay fees.
In a statement yesterday, the RBZ called for proposals for the implementation and administration of the educational loan facility for higher and tertiary education programmes.
“In order to facilitate the envisaged student assistance, the Bank invites proposals from financial institutions registered in terms of the Banking Act (Chapter 24:20) and the Microfinance Act (Chapter 24:29) for the re-establishment of the Educational Support Facility and administration of loans or facilities or any financial accommodation extended in terms of the said facility,” reads the statement.
The RBZ said successful financial institutions must produce a feasibility study in consultation with the bank, Ministry of Finance and Economic Development and the Ministry of Higher and Tertiary Education, Science and Technology Development for a student loan model that optimises student reach and commercial viability.
The central bank said the implementing financial institution must also “Research on, proposing and presenting options viable operational framework for the student loan programme, including recommending the student loan, structure and pricing . . .”
The statement outlined the requirements such as operational model, credit management process for the scheme, development of software programmes and launching and marketing the student loan programme as well as establishing a physical presence at each of the universities among others.
Presenting the Monetary Policy in February this year, RBZ governor Dr John Mangudya said the programme was expected to start in August this year.
Student grants were discontinued in 2006 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 grant loans and schemes paid full fees for students and gave them allowances to cater for other expenses such as accommodation and food. The cadetship programme only paid for three quarters of the fees.
Higher and Tertiary Education, Science and Technology Development Minister Professor Jonathan Moyo last year told delegates at the Zanu-PF Annual National People’s Conference in Masvingo that his Ministry had engaged the RBZ to structure a new loan facility for students.
He said the interventions were part of a raft of measures by the ministry to ensure that universities were relevant to national policy.
Prof Moyo 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.