students’ loan bureau annual reportstudents’ loan bureau mission statement page 01 page 02 page...

Students’ Loan BureauAnnuAl RepoRt[ 2 0 1 2 - 2 0 1 3 ]

Students’ loan Bureau Mission Statement Page01

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Students’ loan Bureau Vision Statement

SlB operational Report 2011-2012

Audited Financials

Supplementary Information for Financial Statements

Students’ loan Bureau Compensation tables 2012-2013

executive Director’s MessageMonica Brown

Page08Students’ loan Bureau Council

Chairman’s Message Gladstone ‘Tony’ Lewars

tABle oF ContentS

Ct

SI

VS

AF

MS

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Page07Core ValuesCV

MISSIon StAteMent

MSTo provide Affordable Financial Assistance

through a Sustainable Revolving Loan Fund to students in need who are desirous

of pursuing tertiary education , thereby

contributing to Social Mobility and Nation

Building.

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The Benchmark Institution for Tertiary Education Financing in

Jamaica.

VISIon StAteMent

VS

02

the ChAIRMAn’S Message

the Students’ Loan Bureau (SLB) is tasked with the responsibility of providing financial assistance to eligible students pursuing tertiary

education, many of whom could not do so without the help of SLB. Fulfilling this mandate is of paramount importance to nation building as through this, the Bureau serves as a corner stone to the educational development of our students at the tertiary level.

Critical to the achievement of the SLBs mandate is the effective operation of the Revolving Loan Fund which should largely be financed by the repayments from beneficiaries. This has not been happening as projected, given the growing demand and the high delinquency being experienced by SLB. In light of this, the focus over the past decade, and more so in recent times, has been on the sustainability of the Revolving Loan Fund, the reduction in delinquency levels and the reach of the entity to those most in need of assistance.

I joined the SLB Council as Chairman in May 2012, and realized from very early that, as a Council, there was a lot of work to be done to address the challenges facing the organization and to accomplish its mission, in the interest of all stakeholders. The issues at the SLB continue to occupy the minds of members of Council in a significant way as we seek to effect necessary

policy interventions aimed at improving the organization’s efficiencies including its operating and management information systems as well as communication. The SLB Council is committed to and will continue the work started towards improvement of the Bureau through its policy

changes and adjustments so as to find the most effective allocation mechanism for the organization.

With the support of Council members and the management team, we were able to address those issues within our purview while we continue to seek the support of the Ministry and other stakeholders in addressing the remaining issues. In recent times, in its efforts to satisfy the increasing

With the hard work of the team, the SLB was able to secure adequate funding to honour its loan commitments for 2012/13.

The growing delinquency

in turn impairs any growth in the Revolving

Loan Fund.

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the ChAIRMAn’S Messagedemand, the SLB has sourced assistance with funding through both private and public sector entities and we will continue to partner with the relevant entities to seek assistance as necessary and to find solutions to the very topical issue of funding tertiary education in Jamaica. With the hard work of the team, the SLB was able to secure adequate funding to honour its loan commitments for 2012/13. Also of note is the increase in average monthly collections recorded for the fiscal year which has developed into a trend which is continuing as the public education campaign has broadened its reach and the response has been positive.

The current economic situation provides some challenges which have impacted collections and the delinquency, but we continue to seek ways to actively work towards accommodating our customers while sustaining the Revolving Fund.

The SLB Council maintains that the operations of the organization must be sustained through the combined efforts of all stakeholders as it is through this avenue of educating our people that the hope and vision of the nation will be achieved.

On behalf of the SLB Council, I wish to express gratitude to my fellow Council Members, the management and staff of SLB for their continued dedication and contribution to the achievement of the Bureau’s mandate.

The Council is dedicated to realizing an efficient and effective Bureau and is confident that the demands and

challenges will be met and overcome as we continue to work together to ensure that eligible students get an opportunity to access tertiary education and ultimately, increasing the SLBs contribution towards accomplishing the 2030 Vision for Jamaica.

Gladstone ‘Tony’ LewarsChairman, SLB Council

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the Students’ Loan Bureau (SLB) continues to be the organization of choice for many Jamaican students seeking to obtain funding for

tertiary level studies. The work of the SLB impacts the lives of thousands of Jamaicans each year as the organization continues its contribution to the educational development of the nation’s youth. The growing demand for student loans has brought with it the need for additional funds each year in order to satisfy the demand.

For the academic year 2012/13, 15,885 students were approved for loans to attend their respective tertiary institutions, compared to the approximately 12,000 approved in the previous year. This growth in demand resulted in an increase of approximately 26 percent in the funds disbursed to tertiary institutions during 2012/13. The growth in demand, coupled with the increasing annual tuition fees charged to students, continues to challenge the SLB’s ability to secure adequate funds to disburse loans. In addressing this challenge, the SLB has had to place

increased reliance on borrowed funds and in that regard loans were obtained from the Caribbean Development Bank and the Petro Caribe Fund, which were used to supplement the repayment flows, to effect loan disbursements. However this is not sustainable over the long term, especially in light of the delinquency problem.

The Bureau continues to grapple with the problem of delinquency which has been exacerbated by the effects of unemployment and underemployment facing many SLB beneficiaries whose loans are due for repayment. The high rate of delinquency has served to (i) reduce the SLBs ability to grow the Revolving

Loan Fund, (ii) increase the need for the SLB to resort to borrowing, and (iii) reduce SLBs ability to adequately respond to the growing demand for loans. The culture of entitlement exhibited by some SLB borrowers is something that needs to change and is being addressed through, inter alia, sensitizing applicants to their responsibilities under the loan agreement and the need to repay their loans so that others can benefit from tertiary education.

We urge all SLB

beneficiaries to repay their student loans.

The increased collection efforts have started to yield dividends, as evidenced by the increased average monthly collections recorded for the year 2012/13, relative to previous years.

exeCutIVe DIReCtoR’S Message

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We urge all SLB beneficiaries to repay their student loans.

In addition to the recent policy changes effected to ensure more manageable monthly repayment amounts, several initiatives were implemented during the review period, to stimulate beneficiaries into making payments to strengthen collections and the Revolving Loan Fund. The initiatives to boost collections include: increased communication and advertising campaign, establishment of agreements with the Credit Bureaus to provide information on SLBs beneficiaries, consultations with the major stakeholders to solicit their support for amendment to the SLB Fund Act to enable deduction at source of income and garnishing of wages of SLB beneficiaries. Agreement was also reached with the Tax Administration Jamaica (TAJ) to assist in tracking beneficiaries and their employers, in order to effect salary deduction orders. The increased collection efforts have started to yield dividends, as evidenced by the increased average monthly collections recorded for the year 2012/13, relative to previous years.

Being mindful that our customers are the reason for the SLB’s existence, the staff aims to provide the best possible service to our customers. This remains a constant in our efforts to improve customer service through several initiatives implemented throughout the organization. In consideration of our applicants and guarantors, the Bureau continued to implement more customer friendly and efficient processes. Work continues on finalization of implementation of the new Loans Management System (LMS) and

the transfer of data to the new system. This will serve to strengthen the system support and operational efficiencies of the SLB and improve the service provided to our customers.

The staff worked assiduously throughout the year to ensure the fulfillment of the Bureau’s mission, despite the challenges faced. I extend my appreciation to them for the successful processing of the increased number of applications and disbursement of loans, as well as the increased efforts to collect which resulted in increased average monthly collections. These successes would not have been possible without the hard work of the staff and their dedication to accomplishing the mission of the SLB.

The Bureau remains steadfast in its role in contributing to the educational development of the nation’s youth, leading to the building of the nation, and ultimately towards building a better Jamaica.

Monica Brown (Ms)Executive Director

exeCutIVe DIReCtoR’S Message

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StuDentS’ loAn BuReAu COunCIL

GLADSTOnE ‘TOny’ LEWARSDirector

ELAInE FOSTER -ALLEnDirector

DIAnnE TOMLInSOn-SMITHDirector

LOuIS CAMPBELLDirector

kASEy BOuRnEDeputy Chairman

08

HEATHER ROBInSOnDirector

VEROnICA WARMInGTOnDirector

MOnICA BROWnExecutive Director GARy FRAnCIS

Director

DInnEL BARnESDirector

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opeRAtIonAl RepoRt 2012-13

overview

the Students’ Loan Bureau (SLB) remained focused on its mandate during the year under review, by providing tuition loans to eligible

Jamaican students through its Revolving Loan Fund to assist in financing their tertiary level education, thereby contributing to their upward mobility and by extension, nation building.

The growing trend in loan demand continued during 2012/13 and resulted in an increased number of students benefitting from loans to defray the cost of their tuition fees. The SLB continued to be the organization of choice for enabling access to higher level studies for thousands of students who otherwise would not be able to benefit from tertiary education. Just under 16,000 students were approved for loans in 2012/13, compared to approximately 12,000 the previous year. This resulted in disbursement of $3.365bn in 2012/13 representing an increase of $602.40mn or 21.81% over 2011/12.

The SLB also provides a Grant-in- Aid (GIA) facility for the benefit of those students assessed to be most in need of additional assistance to defray other education-related expenses, including transportation costs and books. For the academic year 2012/13, over 3,600 students received grants totaling $158.20mn in 2012/13 compared to approximately 3,000 or $129.79mn in the previous academic year. For the fiscal year ended March 2013, the SLB disbursed $131.4mn in grants with the remaining amount disbursed throughout the academic year. The GIA is funded by the Government of Jamaica (GOJ) through an annual Budget allocation.

The Revolving Loan Fund is maintained primarily by the repayment flows from SLB loan beneficiaries, supplemented by borrowing. The rate of repayment continues to be inadequate to sustain the Revolving Fund, consequently, the SLB has had to borrow from public and private sector entities to assist in financing disbursement of loans. As a result the Bureau focused on several initiatives aimed at improving the level of collections during the year, as well as to secure additional funding to address the increased demand. Resulting from foreign currency denominated debt, the SLB incurred foreign exchange losses during the year, which contributed to the reduced surplus recorded at the end of the 2012/13 fiscal year, relative to the previous year.

The loans issued by the SLB are provided mainly under the Targeted Loan facility which focuses primarily on those applicants in the lower household income categories. Despite the significant growth in demand over the years, the available resources (funding, staff, technology), have continued to lag well behind the demand for loans, hence creating major challenges for the organization as it seeks to improve its operational efficiencies and customer service.

notwithstanding the challenges, the SLB Council, management and staff have remained committed to discharging the Bureau’s mandate for the benefit of all stakeholders, resulting in another successful year for the organization in particular, the issuing of loans to an increased number of persons and improving collections.

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loan FacilitiesThe SLB provides three types of loans: Targeted, Parent Plus and Post Graduate loan facilities.

The outstanding balance on the loan portfolio amounted to $10.335bn as at March 2013, ($7.89bn as at March 2012), of which the Targeted facility accounted for approximately 99%.

The Targeted facility is SLBs most popular loan product and repayment of the loan is not mandatory during the ‘in school years’ or the moratorium period. However, beneficiaries and/or their parents/guardians, may opt to pay what they can during this period, to reduce interest costs and lower the monthly amounts when the loan enters repayment.

The SLB loans are unsecured therefore the policy requires that two guarantors undertake the risk of non-payment of the loan. Guarantors may be eligible individuals or corporate entities. All loans are insured against the risk of death or permanent disability, through the self - administered Insurance Fund.

SlB Council

The SLB Council is comprised of ten (10) members and provides oversight and policy direction for SLB’s operations. The SLB Council is chaired by Mr. Gladstone ‘Tony’ Lewars who took up his appointment in July 2012 while the other members commenced in May 2012. The Council appointments are for a three (3) year term.

organization Structure The Executive Director provides the interface between the SLB Council and management and has responsibility for the day to day operations of the organization. The operations of the SLB are discharged through the work carried out in various departments where the policy implementation takes place. The departments are as follows:

1. Loan Processing Department2. Loan Origination & Administration

Department3. Loan Servicing Department4. Legal Department5. Accounts Department6. MIS Department7. Public Relations Department8. Internal Audit Department 9. Human Resource & Administration

Department.

The SLB’s core functions are provided through the Loan Processing Department (LPD) and the Loan Servicing Department (LSD). The LPD has responsibility for the intake and processing of loan applications and these are submitted on line. The LSD has as its mandate, the administration and monitoring of the loan portfolio and collection of outstanding loan amounts. The other departments provide critical support to the core functions of the SLB, as the organization seeks to discharge its responsibilities to its stakeholders in the most efficient way.


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table 1a - loan Applications Received , loans Disbursed : # and $Value - 2008/09 - 2012/13

Academic YearChange 2008/9

-2012/13

2012/13 2011/12 2010/11 2009/10 2008/09 #/$ %# Applications Received 16,476 13,600 9,972 8,738 7,516 8,955 119.15# Loans Disbursed 11,699 10,192 8,175 7,161 5,860 5,839 99.64Value of Loans Disbursed 3,365.50 2,762.80 2,045.23 1,597.45 1,102.88 2,238.52 205.10


loan Applications/processing and Disbursements

The 2012/13 application period began on 14 February 2012 and was scheduled to end 31 October 2012 but had to be extended, given the significant increase in loan applications.

A total of 16,476 applications were submitted compared to 13,600 for 2011/12 application period, representing a (21.14 %) increase as shown in Table 1 below.

Of the applications submitted, a total of 9,061 (55%) represented new applications and the remaining 7,415 (45%) were from returning students who submitted Status Report forms to renew their applications.

table 1: Application and Disbursement data for periods 2009/10 - 2012/13 Applications Received Applications Approved Disbursements

Year no. Received % Increase no. Approved % Increase no. Disbursed $mn. % Increase2012/13 16,476 21.14 15,885 32.19 11,699 3,365.50 21.842011/12 13,600 36.38 12,017 21.41 10,192 2,762.80 35.092010/11 9,972 14.12 9,899 14.77 8,175 2,045.23 28.03

2009/10 8,738 --- 8,623 --- 7,161 1,597.45 ---

Of the total applications received during the year, 15,885 or approximately 97 percent were approved for loans, however after final cancellations, loans were disbursed to 11,699 students who completed the application process. The incomplete applications were cancelled for various reasons including: failure of applicants to matriculate to their institution of choice, failure to provide all required documentation to SLB and pay the fees, as well as receipt of scholarships or other forms of financial assistance by some persons.

The table below provides trend data on loan applications received, as well as the number and dollar value disbursed for the 5 year period 2008 to 2013. Loan applications increased by 119% or an annual average of 24%, whereas the amount disbursed increased at a much faster rate, by 205 % or an annual average of 41% over the period. This is a reflection of the increase in tuition fees levied by tertiary institutions over the period.

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table 2: Disbursement Amount by Institution - Academic Years 2011/12 and 2012/13

Institution Amt Disbursed $mn (2012/13)

Amt Disbursed $mn (2011/12) $ Value % Change

uTECH 1,187.1 1,044.43 142.67 13.66uWI, Mona & SMRT 955.4 790.70 164.70 20.80nCu 521.6 438.76 82.84 18.88Teachers’ Colleges 326.9 263.41 63.49 24.10Community Colleges 54.1 44.54 9.60 21.48uWI, Foreign Based 33.3 25.03 8.28 33.05Other* 287.0 156.13 130.97 83.88

TOTAL 3,365.5 2,762.80 602.70 21.84

table 2a: Dollar Amount Disbursed, % Share per Institution and the number of students for the academic year 2012/13

Institution loan Disbursed $mn % Disbursement no. of Students % Students

uTECH 1,187.1 35.27 3,911 33.43

uWI, Mona 955.4 28.39 3,413 29.17nCu 521.6 15.50 1,382 11.81Teachers’ Colleges 326.9 9.71 1,607 13.74Community Colleges 54.1 1.61 257 2.20uWI, Foreign Based 33.3 0.99 90 0.77Other 287.1 8.53 1,039 8.89

total 3,365.5 100.00% 11,699 100.00


loan Disbursements 2012/13

For the review year, the SLB disbursed a total

of $3.365bn compared to $2.762bn in 2011/12, representing an increase of $602.4mn or 21.81% as outlined in Table 2 below.

Disbursements by Institutions

The SLB provided funding to the forty-five (45) approved tertiary institutions during 2012/13.

Of the institutions funded, the three largest were the university of Technology (uTECH - $1,187.1mn or 35.3%), the university of the West Indies (uWI - $955.4mn or 28.4%), and northern Caribbean university (nCu- $521.6mn or 15.5%).

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The Teacher’s Colleges followed with an aggregate amount of $326.9mn representing 9.7% of the funds disbursed for the year. Diagram 1 below gives a pictorial presentation

of the loans disbursed to the 3 largest institutions, uWI, uTECH and nCu, as well as to the Teachers Colleges and the Community Colleges for the review period.


table 2b: the number of students receiving loans based on Institutions (2011/12 and 2012/13)

# of Students Receiving SlB loans ChangeInstitution 2012/13 2011/12 # %uTECH 3,911 3,591 320 8.91uWI, Mona 3,413 2,980 433 14.53nCu 1,382 1,269 113 8.90Teachers’ Colleges 1,607 1,374 233 16.96Community Colleges 257 224 33 14.73uWI, Foreign Based 90 75 15 20.00Other 1,039 679 360 53.02

TOTAL* 11,699 10,192 1,507 14.79

9%

287M1%

33.3M2%

54.1M10%

326.9M15.5%

521.6M28%

955.4M35%

1,187.1M

OtherutechuWI, Mona& SMRT

nCuTeachers’Colleges

CommunityColleges

uWIForeignBased

Diagram 1: Disbursed loan Amounts by Institution 2012/13

Amount Distributed $Mn (2012/13)

*net of cancellations

When the amount disbursed to each Institution for 2012/13, compared to 2011/12, is disaggregated on the basis of the number of

students benefitting from loans, the result is shown in Table 2b below:

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loan Applications by programmes/Courses – 2012/13

The 16,476 applications received during the 2012/13 application period are distributed across the various programmes of study, as outlined

in Table 3 below. The top 4 programmes were Business Administration and Social Sciences - 25%, Education - 19%, Sciences - 14% and nursing - 10%, which accounted for approx. 67% of demand for the academic year.

Approximately 97 percent of the applications received in 2012/13 were approved.

table 3 - Applications by programmes/ Courses 2012/13 2012/13 Applicantsprogrammes / Courses total # %Business Administration & Social Sciences 4,120 25.0Education 3,092 18.8 Sciences 2,238 13.6 nursing 1,644 10.0 Engineering 825 5.0 Medicine 752 4.6 Information Technology 765 4.6 Law 672 4.1 Arts/Humanities 747 4.5 Hospitality and Tourism Mgmt 509 3.1 Pharmacology 348 2.1 Maritime 411 2.5 Sports Education/Environmental Sciences 98 0.6 Architecture 109 0.7 Theology 52 0.3 Agriculture 94 0.6

Grand Total 16,476 100.0

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loan Applications/Approvals by parish and Gender

Of the 16,476 applications received for 2012/2013 academic year, an amount of 15,885 were approved. Disaggregation of the applications by parish revealed that a total of 4,230 or 26.6% emanated from the kingston Metropolitan Area (kingston and St Andrew). This was followed by St. Catherine, which accounted for 3,681 or 23.2%. The parishes of Clarendon and Manchester accounted for 1,603 (10.9%) and 1,223 (7.7%) respectively. (Refer to Table 4 and Diagram 3 below).

The parishes of Hanover, Trelawny, Portland, St. Thomas and St. Mary have traditionally yielded the lowest demand for students’ loans; as such the SLB’s Public Education campaign placed some focus on these parishes during the year. It is of note that the number of applications emanating from applicants in these parishes increased by 21 percent in 2012/13 compared to

the previous period. The SLB will continue its drive to increase the number of applications submitted by applicants from these parishes.

The trend in loan demand continues to reveal a higher ratio of female applicants to males. As illustrated in Table 4 below, during the 2012/13 period, more females accessed student loans for their tertiary education, relative to their male counterparts. The statistics show that the number of loan applications for females totaled 11,597 and accounted for (70%) of the applications in 2012/13 relative to the 8,595 recorded in 2011/12.

Applications from male students accounted for 30 percent of the overall total during the review year. Of note however is that male students recorded an increase of 1,457 or 43% (to 4,879) in the number of applications submitted for 2012/13, relative to the 3,422 in 2011/12.

1% 1%

1%

2% 2%

10%

4% 3%

5% 5%

5% 5%

14% 19%25%0%

Theology

InformationTechnology

Law Arts/Humanities

Hospitality &Tourism Mgnt

Pharmacology Maritime Sports Ed/Environ Sci

Architecture

Agriculture Sciences Education nurcing Medicine EngineeringBusiness Admin& Social Sci

Diagram 1: loan Applications by programmes/Courses 2012/13

2012 Applicants

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kingsto

n

St. And

rew

St. Tho

mas

St. Mary

Portland

St. Ann

Trelawny

St.James

Hanove

r

Westmorelan

d

St. Eliza

beth

Manche

ster

Clarend

on

St. Cath

erine

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

# o

f A

pplic

ants

Diagram 2: Graph showing loan Applications/Approvals by parish 2012/2013

table 4: no. of loans Applications by parish and Gender 2012/20132012/13 2011/12 Change

parish Female Male total Female Male total Female Male total %

kingston 1,509 770 2,279 1340 689 2029 282 130 412 0.44St. Andrew 1,259 562 1,821 933 387 1320 305 164 469 35.93St. Thomas 360 170 530 268 103 371 73 62 135 32.98St. Mary 437 169 606 281 104 385 127 57 184 24.84Portland 309 117 426 224 71 295 78 35 113 23.02St. Ann 584 233 817 416 137 553 129 84 213 27.51Trelawny 251 110 361 146 57 203 85 39 124 19.32St. James 554 219 773 391 137 528 132 71 203 14.98Hanover 193 74 267 126 44 170 59 25 84 24.31Westmoreland 531 181 712 376 116 492 119 58 177 28.23St. Elizabeth 715 247 962 513 166 679 173 64 237 14.33Manchester 877 396 1,273 678 293 971 171 82 253 19.00Clarendon 1,241 457 1,698 898 326 1224 267 112 379 21.79St. Catherine 2,777 1,174 3,951 2005 792 2797 596 289 885 25.90

TOTAL 11,597 4,879 16,476 8,595 3,422 12,017 2,596 1,272 3,868 21.41

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Measures to Reduce excessive Crowding During Application period

In an effort to deal with the significantly increased demand for the 2012/13 period, the SLB offered the following services which served to reduce the need for applicants and their guarantors to come to the SLB’s office to complete the application process:• The “On the Road” facility involves the SLB

staff going to strategic locations across the island to collect documents in support of applications submitted. This facility also involves the interviewing of guarantors at the remote locations. During 2012, the ‘On the Road’ service was extended to three (3) parishes: St. Ann, Manchester and St. James, which were selected based on the demand noted in these geographical locations and the surrounding parishes. The service was very well received.

• The “Online Guarantor Facility” enables guarantors to download the relevant forms from the SLB’s website - www.slbja.com, have them completed, signed, witnessed and certified after which the document “Drop-off Process” is utilized to submit the completed forms along with other supporting documents. Certification is done by authorized persons viz: an Attorney at Law, a Justice of the Peace or a Medical Practitioner. The document “Drop off” process was utilized by a number of persons during the 2012/13 period.

• Returning SLB beneficiaries are required to complete and submit Status Report forms on-line and pay the requisite fees at any Bill Express location.

The above measures proved useful to the applicants, their guarantors and the SLB and assisted in reducing the heavy ‘traffic’ normally encountered at the SLB’s office during the peak application period.

Funding of loan Disbursements

The increase in applications for the 2012/13 academic year and the related increased tuition costs, coupled with the lack of adequate funding to satisfy the growing demand, were some of the main challenges which confronted the SLB during the period. The exponential growth in demand for students’ loans over recent years has far outweighed the funds available to effect disbursements. This increased demand has resulted in an urgent need for injection of funds to replenish the Revolving Loan Fund.

The primary source of funding is collections from repayment however this is inadequate to satisfy demand. Consequently, the SLB has been placing increased reliance on borrowed funds to supplement collections. During 2012 the SLB benefitted from loans provided by the Caribbean Development Bank (CDB) and the Petro Caribe Development Fund and also accessed funding from the self-administered Insurance Fund. In addition, an allocation was received through the GOJ supplementary estimates thus enabling the SLB to close the funding gap and complete the tuition disbursements totaling $3.365bn for the 2012/2013 academic year.

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opeRAtIonAl RepoRt 2012-13The PetroCaribe Development Fund approved a loan of uS$12mn in May 2012 however this was not guaranteed by the Government of Jamaica. Consequently, the exchange gains and losses resulting from any movement in the exchange rate are borne by the SLB. The foreign exchange losses incurred on this facility totalled $117mn for the 2012/13 fiscal year.

parent plus and post Graduate Facilities

In addition to the Targetted loan facility, the SLB offers the Parent Plus and Post Graduate loans to persons seeking to further their education, utilizing a facility that will allow them to make payments whilst studying at the undergraduate and postgraduate levels. The outstanding balance on the Parent Plus and Post Graduate loans amounted to $10.521mn and $34.376mn respectively, or approximately 1% of the overall loan portfolio, at 31 March 2013.• The Parent Plus loan facility caters to

undergraduate students who are employed and also to parents/ guardians who may wish to apply for the loans on behalf of their children/ spouse. Repayment commences immediately and is salary deducted.

• The Parent Plus facility and the Post Grad facility continue to be accessed by clients, however, the efforts to grow these loan facilities continue to be constrained by the lack of adequate funds.

• The Postgraduate loan facility caters to Masters and Doctoral students who are employed and also to parents who may wish to apply for the loans on behalf of their children/ spouse. Repayment is also salary deducted and commences immediately.

Grant in Aid (GIA)During 2012/13, the SLB continued to provide Grant-in- Aid (GIA) to students assessed as being most in need of additional financial assistance to defray the costs of their education related expenses. Beneficiaries are awarded grants through the following methods: automatic qualification by application of the Means Test, recommendations from tertiary institutions, requests from loan beneficiaries for consideration via letters to the SLB and referrals by the Appeals Committee of SLB.

During the 2012/13 academic year, approximately $158.20mn in Grants were disbursed to 3,632 students. This represented an increase of $28.41mn or 20% (629) students) over the $129.79mn disbursed to 3,003 students in the 2011/12 academic year. (Refer to Table 5 below). At the end of the 2012/13 fiscal year, an amount of $131.4mn in Grant-in-Aid was disbursed and the remaining amount was disbursed throughout the rest of the academic year.

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table 5: # of Students receiving Grants and the $Value Disbursed for Academic Years 2010/11 to 2012/13

Academic year loan Applicants who received Grants #

# of Applicants

% Change $ Value of Grant Disbursed ($mn)

$ Change % Change

2012/13 3,632 629 20.95 156.73 26.96 20.77

2011/12 3,003 599 24.92 129.78 23.64 22.27

2010/11 2,404 - - 106.14 - -

Total 9,039 1,228 392.65 50.59

table 5a: Grant-In-Aid Disbursed per Institution, # of Beneficiaries and $ Value - 2011/12-2012/13 Academic Years

2012/13 2011/12 ChangeInstitution $mn # Students $mn # Students $mn # Students %

uTECH 50.80 966 43.70 893 7.10 73.00 16%

uWI, Mona & SMRT 57.30 1148 44.30 898 13.00 250.00 29%

nCu 26.72 499 23.98 492 2.74 7.00 11%

Teachers’ Colleges 12.40 577 11.94 494 0.46 83.00 4%

Other 5.85 212 3.14 128 2.71 84.00 86%

Community Colleges 1.75 83 2.13 86 -0.38 -3.00 -18%

uWI, Foreign Based 0.60 8 0.60 12 0.00 -4.00 0%

totAl 155.42 3493.00 129.79 3003 25.63 490.00 20%

Table 5a below provides a further breakdown of disbursements on an institution basis for the academic year 2012/13, compared

to 2011/12, to show the dollar value and the number of beneficiaries awarded Grants.

Financial positionSLB recorded total assets of $11.413bn as at March 2013 compared to $9.30bn or 22.6 % lower at March 2012. A surplus of $13.76mn was recorded for the fiscal year ($86.05mn 2011/12), after accounting for foreign exchange loss ($117mn), incurred on the uS$ denominated debt.

loan portfolioOf the total assets of $11.413bn as at March 31, 2013, loans issued to students amounted to $10.335bn (after provision for impairment), and represented 90.6% of the total assets. This compares with a loan portfolio of $7.89bn in 2011/ 12, which was $2.45bn or 31 percent lower.

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The current portion of the Loan portfolio was $2.26bn or 22% for the review period ($1.79bn or 21.4% at March 2012) and the Long Term portion $8.07bn or 78.0% ($6.10bn March 2012). Total Loans in Moratorium or not yet due at March 31, 2013, was $7.16bn or 59% of the total Loan Portfolio. Loans in Repayment totalled $4.897bn or 41% of total loans.

loan Repayments/ Collections

The SLB places heavy reliance on repayment of loans issued under the Revolving Loan Fund as its primary source of funding new loan applications. As such the organization continues to strengthen its public education campaign to build awareness among SLB

beneficiaries on the importance of honoring their responsibility and obligation to repay their loans. The monitoring and administration of loan accounts was also strengthened during the review year and this is continuing.

During the year ended March 31, 2013 beneficiaries repaid $964.0mn compared to $910.0mn which was collected during the year ended March 31, 2012, representing an increase of $54.0mn or 6% over the previous year.

The average monthly repayment of Loans for year in review was $80.0mn compared to $75.8mn for the previous year. Average monthly loan repayments have increased over the years, moving from a monthly average of $71.0mn in 2009 to $80.0mn for year ended March 31, 2013, as highlighted in Diagram 4 below.


Diagram 4: Average Monthly Collections over 5 Years ($mn)

Average Amounts

68

66

70

72

74

76

78

80

82

1 2 3 4 5Years 2009 to 2013

The reported unemployment and underemployment among the SLB beneficiaries mitigate against SLB’s ability to increase collections at the rate required. Based on surveys conducted by the SLB, approximately 50% of beneficiaries reported that they are either unemployed or underemployed.

The Bureau has noted an increasing trend in the number of SLB beneficiaries seeking to restructure or reschedule their loans and defer loan repayments until they are in a position to make payments.

In an effort to improve collections and reduce

21

opeRAtIonAl RepoRt 2012-13delinquency the SLB embarked on several initiatives including: • Entering into agreements with the licensed

Credit Bureaus to provide information on SLB beneficiaries and guarantors. It is expected that this measure will serve to provide an incentive for beneficiaries to repay their loans in order to get a good credit rating.

• Encouraging beneficiaries and/or their parents of exercising the option to commence repayment during the ‘in school years’ or moratorium period, to reduce interest cost and ultimately the monthly payment upon the loan entering repayment.

• Encouraging early closure of loans by offering incentives such as rebates and waivers of charges and fees.

• Continuing discussions with the authorities on the proposed amendments to the SLB Fund Act that will enable inter alia, garnishing of wages.

• Implementation of Salary Deduction Orders for beneficiaries employed in the Public Sector.

• Increased use of TRns to track beneficiaries and their place of employment to facilitate salary deductions.

• Periodic publication of the names and faces of delinquent beneficiaries in the media.

• Partnering with relevant Public and Private Sector Stakeholders with a view to strengthen the SLB’s ability to collect.

• Consultations with various stakeholder groups such as the Jamaica Employers Federation, Jamaica Bankers Association and Passport Immigration and Citizenship Agency, Chamber of Commerce, Jamaica Manufacturers Association, nursing Council, with a view towards gaining their support in the SLBs collection efforts.

• Increasing the use of Debt Collectors/Bailiffs and ultimately litigation, to curtail delinquency.

• Review of the new Loan Management System by Consultants to identify areas

to be addressed as we work towards full implementation of the new System to facilitate improved loan monitoring.

The above initiatives are at various stages of implementation and have contributed to the increased collections recorded for the review year.

DelinquencyDelinquency continues to be a challenge throughout the year and the measures outlined above to increase collections are intended to positively impact delinquency.

Based on gross loans of $12.05bn at March 2013 (net $10.335bn), an amount of $2.13bn or 17.7% was delinquent, i.e. amounts past due for 90 days or more. The $2.13bn also represents 43.5% of Loans in Repayment which amounted to $4.897bn at the end of March 2013. Refer Diagrams 4a and 4b below which show the trend in delinquency over the last 3 years.

22


The high delinquency necessitated increased loan loss provisions by approximately $278mn, to $1.72bn at March 2013 ($1.44bn March 2012), to adequately provide for potential losses in the portfolio.

loans Management System

Development of the Loans Management by Fiscal Services Limited commenced in 2006.Implementation of Phase 1 of the new Loans Management System commenced during the 2012/13 fiscal year. However, given the challenges encountered, with the system and the data transfer, Consultants were engaged to conduct a review of the system and data to

0.00

Mar

-11

Apr

-11

Sep-

11

Feb-

12

Aug

-12

May

-11

Oct

-11

Mar

-12

Sep-

12

Jun-

11

nov

-11

Apr

-12

Oct

-12

Jan-

13

Jul-1

1

Dec

-11

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-12

nov

-12

Feb-

13

Aug

-11

Jan-

12

Jul-1

2Ju

n-12

Dec

-12

Mar

-13

10.0020.0030.0040.0050.0060.0070.0080.0090.00

Delinquency Rate (Repayment loans) %

Diagram 4b: Delinquency Rate as a % of Repayment loans

%

0.00

Mar-11

Apr-11

Sep-

11

Feb-

12

Aug-12

May-11

Oct-11

Mar-12

Sep-

12

Jun-

11

nov-11

Apr-12

Oct-12

Jan-

13

Jul-1

1

Dec-11

May-12

nov-12

Feb-

13

Aug-11

Jan-

12

Jul-1

2

Jun-

12

Dec-12

Mar-13

10.00

20.00

30.00

40.00

50.00

60.00

Delinquency Rate (total loans) %

Diagram 4a: Delinquency as a % of total loans

%

23

opeRAtIonAl RepoRt 2012-13identify the issues and make recommendations on the areas of weaknesses to be addressed by the Developers. Work commenced to fix the issues identified during 2012/13 and progress is being made towards completing the system fixes and resolving the data issues, so as to enable full migration from the Fourth Generation Legacy System to the new Loans Management system.

public education and Customer Focused Initiatives Institution Visits

For the academic year 2012/2013, the SLB’s public education campaign included visits to 64 institutions inclusive of high schools and social development/community organizations (Heart Trust, Social Development Commission, Service Clubs etc.). The outturn for 2012/13 represents a marginal increase in school visits to 64, compared to the 63 institutions visited in 2011/12. Much focus continues to be placed on building public education and awareness with the ultimate aim of improving repayment of student loans.

table 5: Institution Visits 2010/2011 to 2012/13

period Institutions Visited % Increase2012/13 64 2.02011/12 63 46.52010/11 43 43.3

Staff training & Development

The Human Resource function continued throughout the year to consolidate the programs, initiatives and activities geared toward the improvement in the communication process and in the creation of a comfortable and harmonious working environment for all staff.

Programs and activities impacting the staff included the Performance Management

Process which continued with improvements in the preparation of the activities in the process and also a number of training programs were conducted in areas relevant for staff improvement. The recognition and awards programs continued and included the recognition awards ceremony resulting from the 2012/2013 performance period. Several staff received awards for outstanding performance during the period.

The Bureau continued to ensure focus on a healthy, safe and secure environment. In that

24

opeRAtIonAl RepoRt 2012-13regard the Safety Committee continued to be effective in influencing the improvement for benefit of the staff. Improvements in the working environment also enhanced staff morale and camaraderie through several initiatives for social interaction planned and implemented by the Social Committee. The opportunity to celebrate Jamaica’s 50th Anniversary of Independence provided an excellent theme for a number of the activities. The staff complement at the end of the period stood at 74 as there were a few vacancies on the establishment to be filled at various stages of the recruitment process. However, the staff remained inadequate to cater to the additional demand on SLBs resources, occasioned by the significant growth in loan applications over recent years. This has mitigated against SLBs ability to offer improved quality service to its customers.

Conclusion As the demand for tertiary education continues to grow, the Revolving Loan Fund is in urgent need of capitalization to provide the necessary funding for loans to eligible students. Other resources to support this growth are also critical at this time.

Efforts are continuing to increase collections and reduce delinquency so as to strengthen the reflows to the Revolving Fund; however even with 100% repayment, this is not enough to satisfy the growing demand. The measures implemented during the review period will start to show even better results in the years to come as borrowers become more sensitized to their obligations under the student loan agreement and need to repay their loans.

The Public Education Campaign will continue in the upcoming year as we seek to sensitize not only the beneficiaries but also their guarantors as to their obligations and responsibilities under the SLB loan agreement.

The findings of the review by Consultants PriceWaterhouseCoopers and relevant recommendations are being implemented as we seek to improve the operational efficiencies of the SLB. The information technology system support is being strengthened and this is critical to the productivity of the organization and the provision of quality service to our customers.

Despite the challenges, the SLB continues on a path of providing opportunities to more students to get a tertiary level education so as to improve their social and economic mobility and their capacity to contribute to the development of our nation.

A number of successes were recorded during the year and efforts will continue to capitalize on these in the upcoming years, while we work to address the challenges that confront the organization.

25

March 31, 2013

27 Independent Auditors’ Report to the Board of Directors

28 Statement of Comprehensive Income

29 Statement of Financial position

31 Statement of Changes in Financing

32 Statement of Cash Flows

33 notes to the Financial Statements

AuDIteDFInAnCIAlS

AF

2626

StuDentS’ loAn BuReAu – DIReCtoRS CoMpenSAtIon (April 2012 – March 2013)

position of Director

Fees($)

Motor Vehicle upkeep/travelling or Value of Assignment of Motor

Vehicle ($)

honoraria($)

All other Compensation including non-Cash Benefits as

applicable ($)

total($)

Chairman 161,000.00 nil nil nil 161,000.00

Council Member 179,500.00 nil nil nil 179,500.00







StuDentS’ loAn BuReAu – SenIoR exeCutIVe CoMpenSAtIon

position of Senior

executiveYear Salary

($)

performance Incentive

($)

travelling Allowance

pension orother

Retirement Benefits

($)

other Allowances*

($)

Value of Assignment of Motor Vehicle

($)

total($)

Executive Director

2012/13 9,813,237.46 - - - 628,883.33 120,000 10,562,120.79

Management Accountant

2012/13 4,448,654.41 116,936.98 473,008.06 332,813.65 237,250.60 - 5,608,663.70

Loan Processing Manager

2012/13 3,562,158.81 106,858.12 514,500.00 292,097.02 184,582.12 - 4,660,196.07

Loan Origination Manager

2012/13 3,605,915.93 95,332.20 514,500.00 292,022.40 95,545.00 - 4,603,315.53

MIS Manager

2012/13 3,821,138.77 103,573.30 514,500.00 313,333.37 342,306.97 - 5,094,852.41

Loan Servicing Manager

2012/13 3,617,992.71 105,030.36 514,500.00 292,097.02 60,000.00 - 4,589,620.09

Internal Audit Manager

2012/13 3,562,158.81 97,425.20 514,500.00 292,097.02 60,000.00 - 4,526,181.03

Attorney 2012/13 3,562,158.81 95,750.80 514,500.00 292,097.02 60,000.00 - 4,524,506.63

Human Resources Manager

2012/13 4,910,493.79 79,982.50 514,500.00 - 225,308.39 - 5,730,284.68

* - includes payment in lieu of vacation

66

noteS

67

noteS

68

the Students’ loan BureauSagicor Sigma Building

1st & 2nd Floor 63-67 knutsford Boulevard, kingston 5

(876) 754-2559 [LIME] | (876) 619-4SLB (4752) [Digicel] Fax: (876) 754-2552

Website: www.slbja.com

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