Bulawayo schools to apply for loans

Bulawayo City Council has given the green light to a new policy allowing its schools to seek loans for developmental projects, provided they cover 60% of the project costs themselves. This decision aims to enable schools to accelerate their development initiatives despite funding constraints.

The policy change, revealed in the council's latest minutes, addresses the previously restrictive stance that prohibited schools from applying for loans. According to Dictor Khumalo, the council's director of housing and community services, schools were previously barred from seeking loans to protect the city's and the schools' reputations from potential debt-related legal actions and negative publicity.

"The policy was initially guided by the principle of safeguarding the council's and the schools' names. Failure to settle debts could lead to legal troubles and damage the City of Bulawayo's reputation," Khumalo said. He also noted that the Education Act does not support schools in accumulating debt, although school development committees (SDCs), as separate legal entities, may apply for loans.

The council acknowledged that the previous policy led to delays in implementing desired developmental projects due to insufficient resources. Payments from parents and guardians were often delayed, resulting in decreased purchasing power and prolonged project timelines.

"Due to financial constraints, many schools have been unable to undertake much-needed developmental projects promptly. Payments tend to trickle in late, leading to increased costs and project delays," the minutes read.

Recent discussions revealed that financial institutions have been actively marketing their loan products to schools, prompting calls from school heads and SDCs for access to loans to boost development efforts. Two council schools have already applied for loans; one school has managed to procure a bus through a school levy and plans to repay the loan over five academic terms.

The council's new policy will enable schools to apply for loans with council approval. Schools must demonstrate their commitment by raising a significant portion of the project costs themselves. The council will review loan applications, scrutinize project proposals, and ensure that contracts with funders are thoroughly vetted.

"Allowing schools to access loans will provide them with the flexibility to implement developmental projects more swiftly. Despite challenges related to fee payment by some parents, schools should be capable of repaying loans," the council noted.

The policy change aims to align Bulawayo's schools with national trends, where many schools across the country are successfully undertaking developmental projects through loans. The council will guarantee loan payments if schools encounter financial difficulties, provided the schools adhere to the approved terms and conditions.

The proposal is now under review by the financial services and legal departments for further comments. This policy shift reflects the council's commitment to enhancing educational infrastructure and expediting school development projects in Bulawayo.