NSFAF collects less than 1% of N$10 billion loan book
Justicia Shipena
The Namibia Students Financial Assistance Fund (NSFAF) recovered less than 1% of student loans during the financial year that ended in March 2024.
According to the latest audit report by Auditor General Junias Kandjeke, NSFAF recovered only N$18.27 million during the year under review.
“The auditors noted that total recoveries were only N$18,271,916, which is less than 1% of total student debtors owing the Fund,” Kandjeke said.
He found that the NSFAF has been ineffective in collecting student debt, noting that most debtors are years in arrears and there was no evidence that they had been contacted to address the overdue payments.
This finding contradicts figures released by NSFAF in January, which claimed to have recovered N$17.2 million of its N$20 million target for 2023/2024.
In 2020, NSFAF reported it was owed N$2.8 billion in loan repayments from past beneficiaries.
Kandjeke also raised concerns about NSFAF’s loan book management.
He said NSFAF holds student loans valued at N$10.3 billion, but auditors found that repayments were not properly reconciled with balances in the loan management system.
The audit further found a discrepancy in invoicing.
A sample from invoices submitted by the Namibia University of Science and Technology showed a difference of N$16,501 (5.5%) compared to the institution’s statements.
Based on this sample, Kandjeke projected a potential misstatement of N$17.5 million from a total invoiced amount of N$317.7 million.
He said this was due to a lack of proper verification of invoices against student records.
Auditors also found weaknesses in how the fund calculated its expected credit loss (ECL) allowance.
Kandjeke stated that third-party records, specifically the listing of deceased borrowers, did not support the data used for the calculation.
“The auditors could therefore not reliably assess the valuation of the expected credit loss (ECL) allowance for the year under review,” he said.
The portion related to unverified deceased listings was N$1.3 million, out of a total ECL allowance of N$4.36 billion.
While no key audit matters were reported for the financial statements, Kandjeke noted concerns over NSFAF’s future operations.
The cabinet approved the reintegration of the fund into education in the same year.
Kandjeke said the transition does not affect NSFAF’s status as a going concern as of 31 March 2024.
The audit also found weaknesses in NSFAF’s internal systems.
Kandjeke said the Fund does not have approved Standard Operating Procedures, despite adopting the IPSAS framework in 2022.
He said the existing SOPs are outdated and refer to former staff, and some remain in draft form without clearly outlined procedures.
