BRD recovers Rwf 12 billion from students’ loans

Published by IGIHE
On 19 August 2016 saa 06:03
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Rwanda Development Bank (BRD) says it has recovered Rwf 12 billion since 2007 when the government program of asking graduates sponsored at the university to pay back was initiated.

Targeted individuals to repay are graduates in gainful employment. According to statistics, a total of Rwf 80 billion is set to be recovered from graduates who were sponsored by the government.

BRD was handed the management of university students’ bursary since October last year along with recovering the bursary from graduated students in jobs and helping parents to save for their children’s education.

In an exclusive interview with IGIHE yesterday, Fred Mugisha, the head of Education Financing at BRD unveiled that only 13,338 graduates are repaying among 60,000 graduates that were sponsored by the government.

He said that 3,700 graduates paid back the bursary since 2007 while the total of Rwf 830 million has been recovered over the previous seven months.

Graduates who were sponsored before 2015 pay tuition and living allowances fees. An individual is supposed to pay 8% of his/her salary and 7% interest rate of all bursary fees.

On the other hand from 2015, a sponsored graduate will pay 10% of monthly salary and 11% of interest rate.

The law granting the delivery of students loan and bursary stipulates that a person who gets a job has to inform the employer in not later than seven days that he/she studied on government loan .The employer is also supposed to declare it to BRD to start recovering the loan.

Mugisha explains that they are collaborating with various institutions including Rwanda Social Security Board (RSSB), Rwanda Revenue Authority (RRA), The Ministry of Public Service and Labor (MIFOTRA) to identify sponsored graduates earning money but not paying back.

He said that they are holding discussions with an institution which collects information on students’ loan (Credit Reference Bureau) since April, 2016.

“We are seeking ways of how to know where employers operate and the number of their employees who were sponsored by the government. We follow up people working abroad through embassies. Some of them call us asking about how they can pay.

People should understand that paying the loan is a responsibility shared with their employers,” he said.

Mugisha noted that they are faced with challenges including employed graduates becoming irresponsible and neglect repayments after getting jobs and employers unwilling to report sponsored employees which hardens the process of identifying them.

Recovered students’ loan is expected to pay tuition fees for other students entering the university.

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Fred Mugisha, the head of Education Financing at BRD