NMB unveils low-cost education loans service

NMB Bank has started providing low-interest education loans targeting salaried workers with ambitions to pursue further studies and those seeking funds for educating their dependants.

Announcing the launch of the novel credit facility in Dodoma on Tuesday, Chief Executive Officer Ruth Zaipuna said the bank has allocated 200bn/-for the loaning, whose interest charge is pegged at 9 per cent.

Apart from higher education, the new service dubbed NMB Elimu Loan will also cater for financing all other levels of education as well as funding vocational training.

Ms Zaipuna said the financial assistance for mostly increasing enrolment in tertiary education will be serviced in 12 months. Borrowers will be eligible for between 200,000/- and 10m/- annually per person provided their salaries are paid through NMB Bank.

“We have launched this credit service here in Dodoma but the loans will be provided in all our branches across the country,” she stated at the event to premiere the students loan service, which was graced by the Minister for Education, Science and Technology, Prof Adolf Mkenda.

The ceremonious function was attended by many other dignitaries, including the top brass of the Higher Education Students’ Loans Board (HESLB), whose core obligation gets a huge boost from the NMB investment.

“To get this loan, you only need to go to any NMB branch with a copy of your salary slip, the fees structure, the admission letter from a college and NMB Bank staff will readily calculate the size of the loan you are qualified to get,” Ms Zaipuna noted when stating conditions for securing the education loan.

By rolling out the student loans financing facility, NMB has now fulfilled the commitment it made last year by pledging to support the government in lessening the huge funding burden on the shoulders of HESLB.

The bank embarked on the education financing investment after agreeing in principle with the government through the education ministry in late 2022 to offer low-interest loan service for higher education studies.

CEO Zaipuna said this kind of service is being introduced for the first time in the Tanzanian market, adding that NMB is venturing into the new credit terrain to add more value to efforts seeking growth and development of the education sector.

“As major education stakeholders, we are cooperating with the government in this endeavour for the benefit of our fellow Tanzanians,” Ms Zaipuna explained, pointing out the bank’s readiness to continue supporting the education sector with innovative solutions.

In his remarks, Minister Mkenda rallied for similar support and commitment from other corporate stakeholders, saying funding of NMB’s size would be fundamentally transformational.

He said the financing investment made by the bank was a gigantic effort, which means more people will be accorded the opportunity to finance their education and that of those they wish to sponsor.

However, the minister warned against misuse of the loans, which NMB said will not be possible because the borrowed funds will be deposited directly into the accounts of the respective schools or colleges.

Prof Mkenda also had it that despite the funds for higher education loans having increased from 464bn/- when the Sixth Phase Government under President Samia Suluhu Hassan assumed power to 657bn/-in the current fiscal year, initiatives like NMB Elimu Loan are still needed to support national education financing efforts.

Similar sentiments had earlier been expressed by the Permanent Secretary in the Ministry of Education, Science, and Technology, Prof Carolyne Nombo, who said the support NMB continues to give the education sector makes the top lender a true development friend and partner.

On his part, the Chair of the Parliamentary Standing Committee on Education, Culture and Sports, Prof Kitila Mkumbo, emphatically pointed out that the new NMB service was more than a commercial venture since it equally qualified as an impactful development undertaking.

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