BULAWAYO City Council has approved a policy proposal allowing its schools to seek loans for developmental projects provided that they cover 60% of the costs of the projects.
The development was revealed in the council’s latest minutes regarding the proposal to review the policy on council schools accessing loans to implement developmental projects.
According to the minutes, the council’s director of housing and community services Dictor Khumalo reported last month that the schools are not allowed to apply for loans.
“This policy was guided by the principle of protecting the name of council and the schools, as failure to settle debts when due would lead to legal action, attract negative publicity and thus tainting the City of Bulawayo’s good name.
“The Education Act provisions also do not support schools to get into debt. School development committees on the other hand as separate legal personas may be in a position to apply for and access bank loans,” council said.
Council said parents and guardians had taken advantage of the provision resulting in them failing to settle their debts.
“The effect has been that both schools and council had not been able to undertake the much desired developmental projects as and when they wished because of lack of resources.
“The payments trickle in later when the money would have lost its purchasing [power] due to price movements and its value would have been eroded. This resulted in projects taking too long to be implemented or completed,” the minutes read.
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Council indicated that various financial institutions visited schools and attended school heads’ meetings selling their products on possible developments.
“Council schools and SDCs felt that they were lagging in terms of development and wished they be allowed to access loans to enhance and speed up developmental projects.
“Most schools in the city and province have acquired buses and embarked on a number of developmental projects. Community’s view is that council is dragging its schools backwards.
“Two council schools have applied for loans. One school has already procured its bus through a school levy. It has almost raised the first instalment and will need to pay the full cost over five academic terms.”
Council said allowing schools to apply for loans would give them headroom to execute developmental projects.
“It was felt that despite the challenges related to non-payment of fees by some parents, the schools may still be in a position to repay the loans.
“Parents may further be motivated to contribute when they see the relatively quick delivery of school projects than the current long drawn-out progress seen in most of the schools.
“The schools/SDCs will seek council approval through the department for various project funding/loan applications.
“These will be approved provided the department and ultimately the legal section have scrutinised the project proposals and the logistics involved as well as the contracts with the funders.”
Council said the school should demonstrate commitment in raising an agreed percentage of the payment, to lessen the burden of guaranteeing the loan by council.
“Schools throughout the country were undertaking developmental projects through loans obtained from financial institutions.
“Council should also allow its schools to follow suit as long as council will guarantee payment of such loans if schools suddenly cannot pay for one reason or another.
“The department was also eager to see its schools undertaking projects of a viable nature. The proposal was sent to financial services department and legal section for comments.”
