Tanzania: Employers Appeal for Reinstatement in Loans Board

 HELSB Executive Director Abdul-Razaq Badru
By Khalifa Said

Dar es Salaam — The Association of Tanzania Employers (ATE) yesterday appealed to have their seat reinstated in the Higher Education Students Loans Board (HESLB). Speaking with The Citizen by phone, the ATE Executive Director, Dr Aggrey Mlimuka, expressed his concern over the removal of their seat in the board last year, saying it was affecting the flow of key information between the two organisations.

On Wednesday, HESLB announced that they had formed a task force comprising the board's employees and individuals from other unnamed authorities and had been tasked to ensure all employers submit the deductions and the names of their employees, who were HESLB beneficiaries. "If we had our representative, it would have helped in following up the board's debts since the information will be easily shared and worked on instead of using police force and other state organs as it is now the case," said Dr Mlimuka.

According to HELSB Executive Director Abdul-Razaq Badru, who announced during a press conference the formation of the task force, most employers have been violating the law by failing to perform their statutory responsibilities of helping the board to recover loans from their employees.

Dr Mlimuka told this paper that the employers in the country were ready to cooperate with HESLB to search for loan defaulters, deduct and remit all due sums from their employees, who were the beneficiaries of the board provided they were served with timely and accurate information.

"We are ready to sensitise our people to deduct their employees and remit the funds to HESLB, but the board needs to have accurate data at their possession first since it won't be proper to harass the employees, who are not HESLB beneficiaries about paying the loans," he said.

Dr Mlimuka urged HESLB to involve other state authorities, like the Tanzania Revenue Authority, in their search for loan defaulters.

According to HESLB reports, 238,430 former students were supposed to have started repaying their loans amounting to Sh1.4 trillion after the expiry of the grace period.

By November 15, the board had only tracked and issued loan bills to 93,500 beneficiaries. But only 81,055 have repaid theirs, while the remaining 12,445 haven't.

The board has already published the names of loan defaulters and threatened to take them to court. The board is also set to shame the defaulters by making public photographs.

The HESLB Act, 2004 was amended in November and tightened the employers' responsibilities and now they are compelled in 28 days to submit the names of new employees to HESLB for checking their loan status. The board or its agent shall, after notifying the employers, have power to inspect any relevant records of the employer for searching the beneficiaries' information.

"Where an employer fails without reasonable excuse to notify the board that he has, in his employment a beneficiary within a specified period, that employer commits an offence and shall, on conviction be liable to not less than Sh1 million fine," reads part of the amendments.

Where an employer fails to deduct or remit the deductions to the board within the required time, the board shall charge such an employer 10 per cent of the total amount, which is due for repayment. When the employer is unable to pay the charge imposed, then he commits an offence and "is liable on conviction to a fine of not less than the amount unremitted or to imprisonment for a term of not less than 36 months."