How digital transformation is reshaping education financing at HESLB

Dar es Salaam. The Higher Education Students’ Loans Board (HESLB) has explained how its adoption of digital technology has transformed its operations, addressed longstanding concerns, and ushered in a new era of education funding.

During a meeting between HESLB and media editors on Thursday, the organisation highlighted its shift towards digital transformation and the significant impact it has made in revolutionising the higher education financing landscape.

Since its inception close to 20 years ago, HESLB has made a significant impact on higher education, with the latest data showing loans totaling Sh7.2 trillion disbursed to 754,000 students.

An impressive Sh1.34 trillion of matured loans issued since 2005 has already been recovered, equivalent to 64 percent of the total loans.

However, it is the recent strides in digital transformation that are capturing the spotlight.

"We have shifted from a tortoise-like pace in our journey towards digital success to the swift, efficient pace of a rabbit. We’ve introduced digital systems, enabling 100 percent online loan applications, online student payments, and digital credit recovery. Our steady progress towards full automation aims to enhance efficiency and minimise complaints," said HESLB's executive director, Mr Abdul-Razaq Badru.

One of the core components of HESLB's digital transformation is the Student's Individual Permanent Account (SIPA), which streamlines loan applications and provides seamless access to information.

The Digital Disbursement Solution (DiDiS) has revolutionised the digital payment of student loans.

The Employer Portal (EPO) serves as a special reimbursement system for employers, while the Loanees Individual Payment Account (LIPA) offers a convenient reimbursement system for beneficiaries.

The shift to digital systems has been met with enthusiasm and appreciation by experts in the field with Dr Thomas Jabir, emphasising the importance of this transformation.

"In the past, manual processes were associated with inefficiency, the potential for corruption, and favouritism. HESLB’s rapid adoption of technological advancements has helped restore public trust in the system and will continue to strengthen the fund's role in educating Tanzanians," the education expert said.

HESLB's digital transformation goes beyond efficiency. It is integral to the organisation's strategy to adapt to a changing landscape. Mr Badru emphasised, "The future of HESLB lies in digital transformation to enhance efficiency, especially as the government increases funds and expands the scope of beneficiaries to include diploma students."

The digital revolution comes at a crucial time when concerns have been raised about overdue loans, including beneficiaries from the informal sector not coming forward to repay willingly, and some employers failing to submit accurate and timely deductions.

To address these challenges, HESLB is working on a strategic partnership with key public institutions to exchange information and involve local/village government leaders to identify beneficiaries.

Additionally, HESLB is enhancing digital credit recovery services to facilitate payments from anywhere. Mr Badru outlined the plan, stating, "We aim to make it easier for beneficiaries to make payments from wherever they are, offering a streamlined and convenient repayment process."

Digital transformation is not just about efficiency; it is about building a more inclusive and accessible education finance system.

One of the key initiatives in this regard is the Sh6.7 billion Samia Scholarship, aimed at increasing the number of students in science, technology, engineering, mathematics, and medical fields.

The scholarship, which has already benefited 640 students in the last academic year, is set to have a lasting impact on the nation's development, according to experts.

The transformation isn't limited to internal processes but extends to borrowers as well.

As per regulations, every employer is required to deduct 15 percent from their employee's salary and remit it as a student loan repayment, as long as the employee was once a beneficiary of the education scheme.

This automated process will make it easier for beneficiaries to fulfill their repayment obligations, they believe.

An expert in education and community development, Dr Margreth Byemela, said with streamlined processes, greater efficiency, and the inclusion of more students in critical fields, the future looks promising.

“This transformation is not just about embracing technology; it's about making education financing accessible, efficient, and accountable. Tanzanians can look forward to a brighter future in higher education if at all the authorities walk the talk to further reform and transform,” she said.