WINDHOEK- Profile Investment Holdings Managing Director Solomon Nemaire told New Era yesterday that the way affairs are run at Namibia Students Financial Assistance Fund (NSFAF) is like ‘people playing a lottery with taxpayers’ money.’
This come days after Tribesmen - a subsidiary of Profile Investment which was contracted by NSFAF to collect funds owned to it by former beneficiaries of its students loans - was served with a termination letter by the fund for alleged breach of contract.
NSFAF acting CEO Kennedy Kandume on Monday said they incurred losses of N$7.9 million from the student debt recovery contract with Tribesmen.
“It’s a disaster for high education funding,” Nemaire said.
“It’s a tragedy, unless NSFAF realises that they must approach dishing out money with the same zeal as collecting money and that they cannot infinitely disburse money without infinitely collecting it.”
“We have a tragedy on our hands. We are saying we are greatly relieved by the release [termination] because this was a dead end. For us, business is as usual and we hope this incident has wakened them up and will be able to collect money,” Nemaire reacted.
He confirmed they received the termination letter, saying Tribesmen has 14 days to respond.
“We think to throw numbers without the context is grandstanding,” he said of public pronouncements by NSFAF about Tribesmen’s alleged failures.
“It’s actually a celebration of failure in our view. To define benefits only in numbers without attaching value to reconstructing a database of over 50 000 plus student files is missing the point. But we hold no grudges with them,” he said.
He said the right approach is to appreciate that recovery will not succeed without a policy.
He said NSFAF needed to give them a policy which stipulates how the recovery process should be carried out and measures to be taken against defaulters.
Kandume, who announced the termination of the outsourcing of recovery contract, said to date the fund has paid a total of N$14.7 million in fixed management fees to Tribesmen, compared to N$6.8 million recovered by the company from loan beneficiaries, leaving the fund N$7.9 million worse off.
Nemaire said Tribesmen faced a lot of challenges during the recovery process, saying they spent most of their time trying to get NSFAF’s missing records in good shape.
He said Tribesmen gave NSFAF a recovery policy proposal three years ago for consideration, a model which has been successful in student debt recovery in neighbouring South Africa, but the fund has never responded to date.
“We don’t have a recovery policy, which means if a student has a loan of N$50 000 but that student says they are only going to pay N$100 every month to NSFAF, then we can’t force them to pay more. So, what you find at NSFAF is that their default mode of operation is to disburse money and along the line later remember they also have to recover this money.
So, if they don’t give us this tool on how to recover, then we can’t make much progress,” Nemaire said.
He said crucial information is missing in most of the 40 000 files of beneficiaries.
He cited as examples that some files only contained student’s first name and not surnames, some have national identification numbers missing, while other have no residential addresses of beneficiaries.
What is startling, he said, was that many files show disbursement of funds for periods longer than the beneficiaries’ study period.
Nemaire said some files had no contract signed but money was disbursed, which made it legally difficult to pursue defaulters.
Others showed beneficiaries received grants but later were told it is loans.
These are some of the anomalies that Tribesmen had to fill, the company said in its defence.
“That in itself is a separate tender than actually recovery.”
He said that the fixed monthly management fee of N$287 500 paid by NSFAF to Tribesmen was for operational purposes.
NSFAF alleged that Tribesmen’s contract was terminated because of breach.
Neimaire denied breaching any contract with NSFAF.
“They alleged that we undressed them by disclosing some information to the public. But it was data to say they owed how much. This was subsequent after they appeared before a parliamentary committee where they disclosed the same information which we also disclosed. This data was already in the public domain. We think it’s an effort to raise failure and incapability,” Nemaire reacted.