Fewer approvals for revolving student loans
The number of loans granted by the Student Revolving Loan Fund (SRLF) continues to decline.
In fact, only $4.5 million in loans were approved last year, compared to $7 million the previous year, according to the SRLF 2020/2021 financial report for the period ending March 31, 2021.
The latest figure also pales in comparison to the $11 million approved in 2019, $9.2 million in 2018, and $12.9 million in 2017.
In his report, SRLF chief administrative officer Ambrose Johnson did not give a reason for the decline, but said he hoped a faster turnaround time for loan approvals would help reverse the decline. tendency.
“The SRLF has worked hard during the year to reduce the loan approval time from an average of four to six weeks to two weeks, and will continue in the coming year to implement strategies to achieve its target approval time of eight business days,” he said.
“A faster approval time should also contribute to efforts to increase loan approvals and reverse the decline in the number of loans approved in recent years. The SRLF will continue to innovate and add new loan offerings to its traditional student loan portfolio,” Johnson added.
It provided assurance that an increase in loan approvals and faster turnaround time would be achieved without compromising the quality of approved loans.
During the year under review, the SRLF introduced the Digital Transformation Loan (DTL), targeting teachers and educators, and the TopUp Loan, which focused on existing borrowers who wish to continue their studies or retool.
Johnson said that although the SRLF had made tremendous progress in dealing with its delinquency in recent years, there was still a long way to go to reach the goal of a delinquency rate below 10%.
Over the past three years, that rate has stabilized at around 17% from a high of 21%, and the SRLF said the recent economic climate has hampered the collections and legal unit’s efforts to bring it even lower. the rate.
“With economic activity expected to pick up in fiscal year 2021/2022, the SRLF will renew its efforts to further reduce overall delinquency,” Johnson said.
The SRLF said it offered a facility to customers who encountered financial difficulties during the reference period. These included deferring payments, suspending interest, suspending late fees for all borrowers and reducing payment amounts.
These arrangements, which have benefited hundreds of borrowers, have been extended for the full fiscal year of April 1, 2020 through March 31, 2021, and have been extended, which Johnson said was “appropriate in the circumstances”.
He said the SRLF was able to bolster its technology infrastructure, which enabled its employees to transition to remote work with few challenges during the height of the COVID-19 pandemic.
“At the same time, the improved infrastructure has made it easier for its customers to access its services. Improvements are continually being made to SRLF’s operational capabilities, particularly its customer service delivery,” he said while pointing to investment in training as one of the key ways to improve service delivery.
“Part of our strategy to improve our service delivery is to reduce our response time to clients with respect to loan approvals, disbursements and general feedback.”
The SRLF reported that for the year ending March 31, 2021, it saw declines in most of its key financial variables.
It recorded a net profit of $5.6 million, down $1 million or 15% from the previous year. The SRLF noted that the reduction could be attributed to a reduction in interest income on student loans.
Total revenue decreased by $3 million, or 33%, to just over $6.05 million.
And while the Fund noted that the COVID-19 pandemic had heightened its credit risks, it did not anticipate requiring government intervention.
Johnson said that in order to help the SRLF be sustainable, its management committee engaged the services of a consultant to review the fund’s operations “with a view to repositioning the entity for future growth.”
He noted that several recommendations had been put forward, including the need to develop a five-year strategic plan.
“If the recommendations along with the strategic plan are implemented, the SRLF will be transformed into a more customer-centric, agile and innovative entity,” Johnson said.
He said that after reviewing its enabling legislation, the SRLF also made recommendations to amend its law and regulations that would enable it to achieve its strategic objectives.
“In the financial year 2022/2023, the SRLF will celebrate 45 years of service to the people of Barbados. Now is the time to make the necessary changes to position the SRLF to serve Barbadians for another 45 years or more,” Johnson said. [email protected]