24th February 2024 10:46 am
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Chaos at NSFAS leaves everyone in the dark

  • Fresh allegations claim that NSFAS wasted over R260 million on hundreds of thousands of non-existent students.
  • NSFAS has denied the claim, calling it “incorrect and improbable.”
  • Information about what is happening at NSFAS is flying fast and loose and no one, from the media to the fintechs, seems to be able to agree on what exactly is happening at the scheme.

As if things couldn’t get worse for NSFAS, South Africa’s government-funded scholarships programme, amid the axing of its CEO, reports of maladministration and facing a failing funding model, fresh allegations from News24 (paywall) claim that it lost millions of Rands to 157 980 students that didn’t exist.

The report claims, citing documents that News24 has seen, that the four fintech companies, Tenet Technologies, eZaga Holdings, Coinvest Africa, and Narocco, have only paid a total of 390 000 students since July.

In January NSFAS paid around R37 billion to 547 980 university students, the documents seem to indicate. If the fintechs only paid allowances to 390 000, that means that there is a remainder of 157 980 students – are the “ghost” students that the publication is alleging still received funding despite being unaccounted for.

There are some discrepancies in the News24 report. First is that NSFAS has said on many occasions that it is funding around 1.1 million students in total (combined at universities and TVET colleges) and that the direct payment system is from July the only method which students are able to receive their funding through. If the four fintechs only paid the allowances of 390 000 students, who paid the 157 980 “ghost” students?

If the implication from News24 is that NSFAS had paid them through universities or banks as they did before the new direct payment system, what about the other 450 000 plus students under the NSFAS payroll? Who is paying them? No one? Surely there would be a greater uproar if that was the case.

This means that someone, somewhere is either being dishonest or that the the scope of the information around NSFAS’ payments is too massive to fully comprehend what exactly has happened at the scheme this year. What went wrong.

Citing an anonymous source at NSFAS itself, News24 further alleges that the remaining R260.7 million has been lifted by fraudulent activities from NSFAS employees.

In a press statement, NSFAS responded that the report is “factually incorrect and improbable”

“NSFAS takes measures to ensure the accuracy and authenticity of student information through a Know Your Customer (KYC) validation process. This process involves verifying various aspects of a student’s identity to authenticate them and enable access to their funds,” the scheme said. However, it is important to note that the KYC process was only introduced after July to aid the four fintechs in properly onboarding students.

So that leaves the period at the beginning of the year between January and July when NSFAS was funding students using the previous method. This is the period that News24 alleges that the money went missing.

The statement from NSFAS also remarks on the recent allegations from ex-CEO Nongogo that he is being made a scapegoat and that in fact the NSFAS chair Ernest Khoza is the one who is financially benefitting from the direct payment system.

“NSFAS also notes statements related to allegations by the former CEO Andile Nongogo. The Chairperson of the Board has no intention to engage in a slanging match with former CEO, regardless of how provocative the allegations are. These statements are false and unfounded and repeating them doesn’t assist. Of importance is the need to implement the recommendations from the Werksman report which the Board is forging ahead with its implementation,” the scheme has said.

NSFAS has again reiterated that it will continue using the direct payment system to fund its beneficiaries, despite claiming to terminate the contracts of the fintech partners. Two of which have said they are still being contracted to operate the system, namely eZaga and Tenet Technologies.

[Image – Photo by Nathan Dumlao on Unsplash]

Luis Monzon

Luis Monzon

Journalist. Covering education, AAA gaming and consumer tech. Reach me at Luis@htxt.co.za.

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