Why Tanzania’s student loans’ board initiated man-hunt strategy over defaulters

"Fichua," which translates to "reveal," signifies a campaign aimed at encouraging citizens to disclose loan beneficiaries who have not commenced repaying their loans.

Launched on June 28, 2024, the campaign targets 50,000 defaulters and hopes to collect an estimated Sh200 billion by August 31, 2024.

This is part of HESLB’s broader effort to sustain the loan scheme for future students.

The urgency of this campaign is underscored by the significant debt owed to HESLB.

The total matured loan amount stands at Sh2.1 trillion, with HESLB having collected Sh1.34 trillion so far.

On average, the board collects Sh15 billion per month from 220,000 beneficiaries who are employed, self-employed, or have other sources of income. Annually, the board collects about Sh198 billion.

Some stakeholders have raised concerns about the #Fichua campaign, arguing that it violates personal data protection laws.

One vocal critic, Imani Henrick Luvanga, expressed his concerns on the social media platform X, saying, “So, my personal information should be secretly sent to @HESLBTanzania? Before revealing it to someone, try reading the #dataprotection law first.”

However, HESLB Executive Director, Dr Bill Kiwia, responded swiftly to these criticisms, emphasising that the campaign is conducted within the legal framework.

“Tell those speaking out to read Article 23 of the Data Protection Act and see that we adhere to and follow all laws,” he said.

The Act allows the collection of personal data if it is publicly available or if compliance is necessary for the implementation of other laws, which Dr Kiwia argues applies to HESLB’s mandate.

Dr Kiwia explained that HESLB has two primary tasks according to the law: to plan and issue loans, and to collect loans.

"Our loan collection law requires these individuals to repay us, as it mandates us to both issue and collect debts," he said.

He added that instead of complaining, defaulters should focus on when they will repay their debts.

To address concerns about privacy, HESLB has assured that all information received will be scrutinised to locate defaulters and ensure the funds are used to support other Tanzanian students.

The campaign calls on all citizens, including colleagues, spouses, and neighbors of defaulters, to provide information such as the defaulter’s name, university attended, current workplace, and company ownership.

Similar strategies have been employed in other countries with success.

For example, in Kenya, the Higher Education Loans Board (HELB) uses similar tactics to track down loan defaulters, including public campaigns and collaboration with employers to deduct loan repayments directly from salaries.

This approach has significantly improved their recovery rates and ensured the sustainability of their loan schemes.

In India, the government has also implemented strict measures to recover student loans, including legal actions and publicizing defaulters’ names.

These measures have resulted in higher repayment rates and more funds available for new students.

Despite the criticisms, HESLB has made progress in debt collection. The board currently collects Sh15 billion per month and has recovered Sh1.34 trillion so far.

These funds are crucial for maintaining the revolving loan scheme, which ensures that more Tanzanian students can benefit from higher education funding.

Dr Kiwia emphasised the importance of loan repayment for the sustainability of the scheme.

“The amount owed is significant and crucial for continuing to fund loans for other students. It represents three percent of HESLB’s total budget,” he said.

In response to long-standing complaints from beneficiaries about increasing debts, the government recently abolished some charges imposed by HESLB, making it easier for defaulters to come forward and repay their loans.

“All this is done to make it easier to repay our funds to finance many other needy students. We need these people to come forward and repay the loans without excuses before we are forced to implement the law as it demands,” Dr Kiwia stated.

A stakeholder, Judith Jackson, wrote on her instagram page, “The #Fichua campaign is a bold and necessary step by HESLB to address the persistent issue of loan defaults.

While it has faced criticism, the campaign operates within legal limits and aims to ensure the sustainability of the student loan scheme.”