- In Parliament, the Special Seats (Chadema) MP, Esther Matiko claimed that many Tanzanians wanted to access the loans but the interest rate set at 15 percent and a fine of six percent were considered to be too high.
Dar es Salaam. The Higher Education Students Loans Board (Heslb) has today February 3, 2021 clarified on deductions and loan repayment charges after the issue arose in parliamentary sessions yesterday.
In a public statement issued by the board's executive director, Abdul-Razaq Badru, the clarification was based on the views of various stakeholders including MPs that were published in various media outlets.
In Parliament, the Special Seats (Chadema) MP, Esther Matiko claimed that many Tanzanians wanted to access the loans but the interest rate set at 15 percent and a fine of six percent were considered to be too high.
Thus, in its clarification, the board has said a 15 percent deduction from gross salary is not interest but a loan repayment deduction itself.
"These deductions do not apply on interest as some stakeholders and the media have stated. These are the total deductions that a beneficiary deducts from his/her monthly salary which are submitted to Heslb by the employer before the 15th day of the following month,” reads part of the statement.
The clarification also addresses the one percent charge which is deducted only once per lump sum when the beneficiary submits the first deduction.
"The purpose of this levy is to fund the operation of recovery activities such as hunting for beneficiaries…" the statement said.
The other levy mentioned is the Value retention fee of six percent.
"This is levied annually on outstanding loan balance and not on the principal loan.
But also, according to the clarification, there is a 10 percent penalty for beneficiaries who delay in repaying loans.
"This is a punishment aimed at reminding the beneficiaries of the importance of starting repayment early. "After 2016, this penalty was levied 24 months after the beneficiary graduated, before it was 12 months after graduation," it said.