HESLB joins forces with key institutions to secure loan recovery via data-sharing

Dar es Salaam. The sustainability of the Higher Education Students Loans Board (HESLB) has been a subject of concern in recent years, primarily due to the reluctance of some beneficiaries to repay their loans.

As the board grapples with this challenge, it has consistently explored new strategies to ensure that the revolving fund remains viable for future generations of Tanzanian students.

The latest development in this ongoing effort is HESLB’s partnership with three key institutions, which promises to significantly enhance the board’s ability to recover outstanding loans.

On September 11, 2024, HESLB signed agreements with the National Identification Authority (NIDA), the Registration, Insolvency, and Trusteeship Agency (RITA), and CreditINFO Tanzania Ltd.

These agreements are part of a broader initiative to leverage technology and data sharing to track down defaulters more effectively.

Read: How 15pc deductions helped HESLB double loan recovery

This move comes at a crucial time, as the board has disbursed an incredible Sh7.2 trillion in loans to over 754,000 Tanzanians since its establishment in 2004. Of this amount, Sh2.1 trillion has matured, yet only Sh1.5 trillion—about 71 percent—has been recovered.

HESLB executive director, Dr Bill Kiwia, highlighted the importance of these partnerships during the signing ceremony.

“In our efforts to collect loan repayments, we need these partners... so we ask you to convey the message to our clients that we are now working with these three partners, and we will announce others in the coming days... our aim is to reach all defaulters using these systems,” said Dr Kiwia.

This collaboration is set to utilise integrated databases and ICT systems, making it easier for HESLB to identify and pursue defaulters, particularly those in the private and informal sectors.

The significance of this development cannot be overstated, as the amount owed is vital for the continuation of the loan scheme. According to Dr Kiwia, the amount owed is significant and crucial for continuing to fund loans for other students. It represents 3 percent of HESLB’s total budget.

Experts in the education and finance sectors have welcomed this initiative, viewing it as a necessary step towards securing the sustainability of the student loan scheme.

An education policy expert, Grace Mwakalonge, noted: “The integration of technology and data sharing is a game changer for HESLB.

This approach not only enhances the board’s ability to recover loans but also ensures that the revolving fund remains available for future students.”

“It’s a win-win for both the board and the beneficiaries.”

CreditINFO’s chief executive officer, Mr Edwin Urasa, expressed confidence in the new partnership, stating: “This is a good thing if a client is a good payer, but if not, it is advisable to start repaying your debts, including the higher education loan, because we have borrower information from various institutions, including HESLB... and we operate in compliance with the law.”

However, while the technology-driven approach is promising, it is not without challenges. One significant hurdle is the sheer number of defaulters and the varying reasons behind their failure to repay loans.

Some beneficiaries are unemployed, while others may be working in the informal sector, making it difficult for traditional methods of debt collection to be effective.

This is where the new partnerships come into play, providing HESLB with access to comprehensive data that can help pinpoint defaulters’ whereabouts and financial status.

RITA’s chief executive officer, Mr Frank Kanyusi, emphasised the importance of this collaboration in the context of government directives.

“This is part of the government’s directive to ensure that all its institutions integrate their ICT systems in service delivery to citizens. This is what we are doing to collectively ease loan repayment for the benefit of others,” said Mr Kanyusi.

Despite the board’s efforts, there are still those who have remained silent, avoiding repayment. In response, HESLB has been coming up with various campaigns, including the #Fichua initiative and #Wewe ndio Future, which encouraged citizens to report defaulters.

The campaigns have been bearing fruit, according to HESLB, by encouraging loan repayment to be taken as a patriotic duty. Dr Kiwia, in his closing remarks, reiterated the importance of loan recovery for the continuity of the loan scheme.

“The sustainability of this fund depends on the willingness of beneficiaries to honour their obligations. With the help of technology and our new partners, we are confident that we can recover a significant portion of the outstanding loans and ensure that future students have access to the financial support they need.”