Nana Kwaku Agyei Yeboah, Chief Executive Officer of the Student Loan Trust Fund

The Students Loans Trust Fund (SLTF) says it is taking steps to ensure that it is not overwhelmed by the number of senior high students who will apply for loans from the 2020/2021 academic year.

With 145,000 students expected to enter tertiary institutions in the 2020/2021 academic year when the first batch of free senior high school (SHS) graduates will be ready for tertiary education, the Chief Executive Officer of the fund, Nana Kwaku Agyei Yeboah, said the SLTF was working with the Ministry of Finance and other relevant stakeholders to diversify sources of funding.

Projections

The SLTF is projecting that if 10 per cent of the projected number of students entering tertiary institutions applied for loans, in addition to continuing 27,000 students, the fund would need almost GH¢190 million annually to meet their needs.

If 15 per cent applied, the trust projects that about 74,250 would need financial aid, amounting to more than GH¢284 million, and if 20 per cent of the students, including continuing ones, applied, the fund would require almost GH¢379 million to meet the financial needs of the 99,000 students.

“We are working with the Ministry of Finance to get more sources of funding. The discussions are still at the early stages but we don’t want to be overwhelmed by the avalanche of students who will be applying. We need to position ourselves to deal with it,” Nana Yeboah told the Daily Graphic during the SLFT students’ summit in Accra.

The summit brought together participants from the country’s tertiary institutions to deliberate on the loans application process as well as the measures to make it sustainable.

“We are thinking ahead of time. The summit is one of many stakeholder consultations to get more ideas on how to be able to revamp the entire funding regime,” he said.

Recovery

He said recoveries had improved with the introduction of a number of payment options, including mobile money and an application (app) that made it possible to pay through Visa and Mastercard.

According to figures from the SLTF, loan recoveries increased by 57 per cent from GH¢17.5 million in 2017 to GH¢27.4 million in 2018, while non-performing loans (NPLs) reduced from 51 per cent in 2017 to 38 per cent as at the end of last year.

In 2018, the fund targeted GH¢30 million but collected GH¢27.4 million or 91 per cent. For 2019, the SLTF is targeting GH¢35.6 million collections from loan beneficiaries.

Nana Yeboah said a major setback in the past included difficulties in tracing borrowers in the informal sector and failure of some employers to deduct from loan beneficiaries monthly salary to repay the Trust Fund.

The Principal Manager of Operations of the fund, Mr Isaac Kofi Abbew Nkrumah, said as part of the considerations for the student loan, prospective applicants would need to ensure that both their institutions and programmes were accredited.

Guarantor

He said the fund had also removed impediments in the form of guarantors that made it difficult for students to apply for the loan.

Mr Nkrumah said unlike in the past when students had to get three Social Security and National Insurance Trust (SSNIT) contributors as guarantors, the number had been reduced to one and the guarantor must have contributed for at least 36 months and be below 53 years.

The fund, he said, had also diversified the type of guarantors to include recognised religious bodies, metropolitan, municipal and district assemblies or corporate bodies, which were members of the Ghana Club 100 or listed on the Ghana Stock Exchange.

He said currently 44 assemblies had signed up to serve as guarantors.

The President of the National Union of Ghana Students, Mr Tinkaro Asare Osei, noted that although the services of the fund were helping students financially, there were concerns about the delay in payment.

He also said the fluctuations in the amount of loans approved per student made it difficult for them to plan their finances during a semester.

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