By Feston Malekezo
The Higher Education Students Loans and Grants Board (HESLGB) has written the Director of Public Prosecutions (DPP) to commence prosecution against two non-governmental organisations and one bank [names withheld] for contravening the Loans Board Act.
The Act stipulates that employers who have workers who obtained loans from the board should be deducting money from workers’ salaries as one strategy of loan recovery.
However, the board is alleging that the three employers have not been responsive since 2018.
Spokesperson for the board Millie Kasunda said Tuesday that, given the rising rate of unpaid loans, the board resolved to apply all recovery provisions as provided for in the HESLGB Act, one of which is to prosecute employers who are suspected to be non-compliant.
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“The board continues to make tremendous efforts in engaging employers in various sectors to facilitate the recovery of these loans. Apart from government agencies and departments which have given positive response, a good number of private sector employers are also positively responding to the recovery call.
“However, there is also a good number of employers, especially in the private sector, that have remained non-responsive. Some keep making empty promises whilst others do not respond at all,” she said.
The loans and grants board, which is governed by an Act of Parliament, is mandated to provide loans and grants to needy and deserving students pursuing higher education in accredited institutions in Malawi and to recover mature loans from them.
However, according to the board, it is facing challenges in recovering mature loans, estimated at K4 billion.
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DPP Masauko Chamkakala acknowledged receipt of the request and case files, hinting that they will proceed prosecuting the three.
“As things stand, the loans board submitted the details for the companies on Friday [last week]. So, we are reviewing the evidence and tightening all loose ends and, shortly, we will be commencing action,” he said.
Chamkakala said, according to the law, every employer has an obligation to make sure that the deductions are effected.
He observed that in some institutions, deductions are effected but institutions are not remitting the same to the board which, he said, is even a more serious offence.
If successful, this would be the first case the Loans Board would, through the DPP, prosecute to recover loans under the student’s loans fund.
