NSFAS administrator cancels direct-payment contracts of 4 service providers to students

NSFAS administrator Freeman Nomvalo. Picture: Jacques Naudé/Independent Newspapers

NSFAS administrator Freeman Nomvalo. Picture: Jacques Naudé/Independent Newspapers

Published May 27, 2024


The recently-appointed National Financial Aid Scheme (NSFAS) administrator Freeman Nomvalo has confirmed that he has since filed court papers to terminate its agreement with four service providers contracted to facilitate the scheme’s direct payment system.

This comes after Nomvalo addressed the media for the first time since being appointed by Higher Education Minister Dr Blade Nzimande last month.

He said he has filed papers in court to cancel the direct payment contracts awarded to four companies to pay allowances into students’ bank accounts.

Some of these entities include Ezaga Holdings, Coinvest Africa, Narraco Corporation, and Tenet Technologies that were appointed to carry out payments to NSFAS beneficiaries amid technical glitches and costly bank charges.

The termination of these contracts are part of recommendations made by Werksmans Attorneys last year, after it found that these service providers were appointed irregularly.

“NSFAS has taken significant steps towards implementing the recommendations of the Werkmans Attorneys report. The report commissioned by NSFAS provides a comprehensive analysis of the scheme and identifies areas of improvement, particularly in relation to procurement systems and management deficiencies.

“Among the major procurement deficiencies identified was in the appointment of direct payment service providers, namely Ezaga Holdings, Coinvest Africa, Tenet Technologies, and Narraco Corporation.

“This morning, I am happy to announce that the process to terminate these contracts having commenced with filing of the necessary court papers on May 24, 2024. In the termination of these contracts, NSFAS collaborated with the Special Investigative Unit (SIU),” Nomvalo said.

He added that a new payment allowance mechanism for 26 universities and 50 Technical Vocational Education and Training (TVET) colleges would be fully developed by September.

Last year, the scheme, tasked with supporting the education of deserving but financially disadvantaged students, came under fire over failure by service providers to pay students their monthly allowances.

Nomvalo said the new payment distribution method for beneficiaries at TVET colleges across South Africa is already working which will see the return of a direct payment system and NSFAS pay the monthly allowances of students directly into their personal bank accounts.

This new system currently applies to TVET students, as university students are being paid directly by the universities.

He added that as of today (Monday), more than 211 591 students’ bank accounts have been verified, while 7 160 accounts failed verification due to various issues, such as students providing their parents’ bank account details instead of their own.

The Star