The Revolving Student Loan Fund (SRLF) reports a reduction in delinquencies and fewer people applying for an education loan at this institution.
In its financial report for the year ended March 31, 2020, SRLF reported that the number of approved loans fell from $ 9.3 million from the previous year to $ 6.8 million.
At the end of the reporting period, loans approved but not yet issued were $ 5.96 million, compared to $ 10.91 million at the end of the previous reporting period.
SRLF has traditionally lent primarily to those students who study outside of Barbados, given the government’s policy of providing citizens with free education up to tertiary.
In a report released earlier this year, Acting Administrative Manager Ambrose Johnson said SRLF has initiated strategies to mitigate the downward trend in loan approvals.
However, he said that as COVID-19 begins to have a negative impact from the last quarter of the reporting fiscal year and is expected to continue through fiscal 2020/21, SRLF is optimistic to keep loan approvals at the same fiscal year level. … 2019/20.
Cash that had not yet been returned to the FSSB at the end of the reporting period amounted to USD 92,859,430 (of which USD 25,503,916 is provision for loan losses) compared to USD 104,956,544 in the previous year. This includes principal and interest receivable.
Johnson acknowledged that delinquencies were high among student loan agencies worldwide and that student loans were inherently more risky than the average loan offered by traditional financial institutions.
However, he said, despite this reality, efforts can be made to minimize losses due to late payment.
“The international average student loan delinquency rate is 12 percent. The FOSS overdue rate as of March 31, 2020 was 17%. While this is an improvement from 27% in recent years, SRLF’s goal is to reduce delinquent loans to less than 10% by March 2022, ”he said.
Suzanne Griffith, Loan Manager, told Barbados TODAY that due to the ongoing COVID-19 pandemic, SRLF has launched a program that would make life easier for students struggling to get their loans back.
“Where possible, we have initiated subsidized living because we are aware that there are many students who cannot pay because of unemployment and in some cases because of difficulties,” she said.
“We have proposed a reduction in interest rates and a grace period of three or six months, and at the end of this period we will review it, and if the situation does not improve, we are ready to consider extending it.”
Griffith said that since its introduction last year, there have been “quite a few students” who have taken advantage of the program, mainly due to unemployment.
Johnson said in his report that SRLF will continue to be active in fundraising as it strives to reduce its delays and ensure that funds are always available to loan to Barbadians wishing to pursue their “academic dreams.”
In addition to local efforts, Johnson said SRLF has engaged international collection agencies to attract overseas borrowers.
For the fiscal year under review, SRLF’s total revenue increased $ 3.8 million, or 73 percent, over the previous year. Compared to the previous year, interest income on loans increased by $ 2.5 million, or 57 percent, and on investments, by $ 1.1 million, or 160 percent. These two sources of income were the main contributors to the significant increase in total income.
The report says: “The phenomenal revenue growth is the result of SRLF’s fundraising on old, chronic overdue loans that were previously written off.
“In addition, the expanding investment portfolio has enabled SRLF to increase its return on investment. With a significant increase in total revenue from the prior year and a decrease in expenses of $ 2.3 million, or 49 percent, net income for the year was $ 6.6 million, ”the report said.
“As a result of improved collection of payments, loan receipts increased over the year by 18 percent, or $ 2.8 million, compared to the previous year. Total receipts reached a record $ 18.2 million at the end of March 31, 2020. This revenue growth has allowed SRLF to continue to be self-sufficient in covering its operating costs and providing funds for new loans, thereby eliminating the need to rely on the Government for any subvention. In addition, the fund was able to expand its investment portfolio, moving it from $ 22 million in the previous year to $ 36 million as of March 31, 2020, ”the company added.
At the end of the fiscal year, total assets increased to $ 108 million, up from $ 101 million the previous year. This increase was achieved despite a $ 4 million reduction in student loan receivables. The decline was offset by an increase in the investment portfolio by $ 14 million.
SRLF Chairman of the Board Betty Alleyn-Headley said the organization will continue to position itself “for any current and urgent challenge.”
“To stay relevant, SRLF will have to amend the legal framework, continue to improve its processes, introduce new products, improve the corporate governance structure, continue to use information technology, and strengthen its engagement. employees and customers, ”said Alleyn-Headley. ([email protected])