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SLB fighting fit - Bureau says it is in good financial health

Published:Sunday | November 29, 2015 | 11:00 AMRyon Jones

The Students' Loan Bureau (SLB) has declared that it remains in good financial health despite indications that several beneficiaries remain delinquent in repaying their loans.

The SLB was slated to publish a list of chronic delinquents today, but that was postponed even as Bureau officials dismissed speculation that a recent advertisement for a consultant is an indication that it is facing increasing financial difficulties.

"The SLB remains a profitable organisation and with the increased funding from repayment flows and injections by the Government of Jamaica through education tax, there are no concerns regarding the long-term sustainability of the SLB at this time," said the entity in an emailed response to questions from The Sunday Gleaner.

The consultant is being brought in for an initial six-month period to conduct a diagnostic review of the operations of the SLB, with particular emphasis on improving its long-term viability and sustainability and to advise on a strategy for the entity to conduct its lending operations.

Funding for the consultancy services has been provided by the Caribbean Development Bank (CDB) which has given the SLB two loans totalling US$40 million.

That money, paid over in 2010 and 2012, was to be used to assist with the funding of tuition loans and to address the funding gap which was being experienced by SLB.

"As a part of the second loan agreement with the CDB, a technical assistance grant was provided for a consultant to assess the organisation and make recommendations regarding its sustainability over the long term and to inform any future funding support," said the SLB.

 

INCREASED COLLECTIONS

 

"The overall funding of the SLB has changed since the initial loans provided by the CDB, with the increased collections from loan repayments, and through the injections from the increased education tax.

"In keeping with the loan agreement, the CDB still requires the consultancy review on the operations of the organisation to inform any possible future need for funding support to the SLB."

The delinquency rate for the SLB now stands at 20 per cent of its total loan portfolio and 49 per cent of loans that are in repayment.

The SLB has been employing several strategies to get persons to repay their loans such as extending its loan tenure to 15 years for persons who have pursued the traditional three to four year programmes, and 20 years for persons in higher cost programmes with longer in-school tenures. This extension creates more manageable monthly payment to encourage repayment of student loans.

The SLB has also increased the use of salary deduction orders to collect through organisations where beneficiaries are employed while it has continued the 'Every Dollar Counts' initiative which allows persons to make formal arrangements to pay what they can afford until their income increases.

 

INCREASED LOAN REPAYMENT

 

"The SLB is a licenced information provider under the Credit Bureau Act and as such provides data on beneficiaries accounts to the registered Credit Bureaus in Jamaica. This is contributing to increased loan repayment," said the entity.

Other steps taken by the SLB include expanding its cadre of debt collectors and external attorneys to assist with debt recovery and greater partnerships with public- and private-sector agencies to aid in the collection efforts.

The SLB has also sought to develop its partnerships with the tertiary institutions - through the establishment of a Memorandum of Understanding to allow for greater information sharing and assistance with repayment.

ryon.jones@gleanerjm.com