Chase for education loan defaulters begins

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MASERU — The chase has begun.

This week the National Manpower Development Secretariat (NMDS) began sending letters to employers in Lesotho asking them to submit names of all their workers who could have benefited from government scholarships.

In a letter to the companies, NMDS director, Letholetseng Ntsike, requested the firms to send lists of all their staff members to the secretariat’s recovery section to enable the section to identify those who had not paid up their study loans.

“The lists shall be used to locate debtors that were granted scholarships while furthering their studies and have not made any repayments to date,” Ntsike said in the letter.

The lists are expected to reach the NMDS’s loan recovery section by December 2.

The Lesotho Times is one of the companies that received the letter.

The decision to ask companies to provide the names of employees who benefited from the scholarship fund comes a few weeks after the NMDS said it was going to step up efforts to recover the unpaid funds.

The NMDS earlier this month said it had engaged debt collectors to chase all former students who had not paid their loans since the institution was set up in 1978.

It said it would chase all debtors in Lesotho, neighbouring South Africa and the rest of the world.

Ntsike two weeks ago said the numbers of people who have not paid their debts runs into thousands.

She said the government is owed more than M1 billion in unpaid education loans.

Ntsike said the plan was to unleash debt collectors to start tracing the debtors sometime in April next year.

She said people in the meanwhile can still negotiate with the NMDS to discuss repayment terms.

In a notice to potential debt collectors earlier this month, the NMDS said borrowers had undertaken “to repay 100 percent of the loan if he or she decides not to work within Lesotho after completion of the course of training”.

“The borrowers have requested the government to assist in financing the entire training of the borrower by granting loans to them in the amount specified in their contracts.

“It is clearly stipulated in the borrower’s contract that upon completion of the student’s educational course, the national cost of each year shall be totaled and the total shall form the basis of repayment.”

The NMDS has for years struggled to collect hundreds of millions of maloti in educational loans to Basotho students studying in Lesotho and abroad.

Although it has forked millions over the years very little has been collected in return.

The education financial support, which was established by the government in 1978, was meant to be a revolving fund.

Ntsike told the national television three weeks ago that the secretariat had collected only M20 million for this financial year from an outstanding loan of M700 million.

Last year there was an outstanding loan of M500 million but the NMDS managed to collect only about M19 million.

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