NSSA recently availed funds to FBC Bank and Metropolitan Bank for onward lending as working capital and for asset financing purposes to contributors to the national pension fund, who would have been retrenched and have viable income generating projects.
A key prerequisite for being eligible to access the loan facility states that the applicant must be aged between 18 and 54 years. “Having made contributions since the inception of NSSA until the June 30 this year, I find it weird that I cannot derive a single benefit,” said a disgruntled pensioner.
“Yet an 18-year-old who probably contributed for two months and got retrenched is able to get maximum benefits,” he said. Loan applications being repayable over periods of six to 12 months have to be for a minimum of US$500 and a maximum of US$5 000.
The money was lent to the two banks for on-lending to retrenched contributors at an interest rate to the end borrower of 10% per annum. The banks are liable for repayment of the loans to NSSA, so they accordingly take the risk with the end borrower.
The authority said that borrowers have to meet the banks’ lending criteria as well as NSSA’s. “The loans are intended for contributors who have been retrenched and have not yet reached the age when they are eligible to receive their retirement benefit,” NSSA said.
“The normal retirement age for the NSSA pension is 60, if the contributor is no longer working,” said the institution, adding that some categories of people, who have been working in jobs classified as arduous, can receive their pension at age 55. Said NSSA: “This was the basis for fixing 54 as the upper age for this loan.”
The authority said it sees no reason why, if a person is over 55 but under 60 yet not receiving the NSSA pension, should not be considered for the loan, provided they satisfy the concerned bank’s normal lending criteria.
However, the banks have also been lambasted for stringent lending conditions to the extent that NSSA said it would soon be communicating with them asking that they be flexible over the age issue.
Other requirements for consideration to access the loans include a bankable business proposal, information on whether the applicant has invested their own money into the project, and proposed security among others.