HARARE, Zimbabwe's Ministry of Higher and Tertiary Education, Science and Technology says its student educational loan facility is now operational, with interest on the loans pegged at up to 10 per cent per annum for banks and at two per cent per month for participating microfinance institutions.

Six financial institutions -- CBZ, NMB, ZB and the People's Own Savings Bank as well as Getbucks and Eduloan -- were chosen by the Reserve Bank of Zimbabwe (RBZ) to administer the facility.

The objective of the Higher and Tertiary Education Loan Support is to assist current and prospective students who do not have the requisite financial resources to support their college of university education, the higher education ministry said Sunday. "The maximum loan tenure under this facility will be 60 months and beneficiaries are not permitted to access multiple loans through different institutions under the facility."

The facility excludes Zimbabwean students undertaking studies at foreign-owned educational institutions and those on full government or other scholarships as well as foreign students attending Zimbabwean universities.

The central bank, which is financing the facility, will be responsible for the monitoring of loans and how participating banks are behaving in administering it.

Where borrowers under the facility abuse the funds, the full loan amount will become immediately due and payable, the ministry said.

The new facility comes after government discontinued the student loans and grants a decade ago due to cash flow challenges.A cadetship programme under which students also got financial support which was introduced after the grants were suspended was again put on hold on back of financial constraints.