Photo: National Student Financial Aid Scheme (NSFAS)/ Facebook

NSFAS: How will student allowances be distributed?

NSFAS board has cancelled the contracts of its four direct payments service providers due to tender irregularities


Photo: National Student Financial Aid Scheme (NSFAS)/ Facebook

The Democratic Alliance, has demanded that the NSFAS board appears before parliament and provide clarity as to how they will ensure students are not negatively affected by the cancellation of the four direct payments contracts.


This follows an investigation by law firm Werkmans Attorneys and advocate Thembeka Ngcukaitobi SC, which exposed NSFAS CEO Andile Nongogo, in that he hand-picked the four inexperienced service providers to handle the R47billion fund.

The four axed service providers are eZaga Holdings, Coinvest Africa, Norraco Holdings and Tenet Technology.

ALSO READ: NSFAS to terminate contracts of eZaga and other service providers

Nongogo, who has since been suspended, has until Monday to provide reasons as to why his contract should not be terminated.

DA Shadow minister on Higher Education Chantel King has questioned how students will now receive their allowances.

“We need to be briefed on how NSFAS will implement direct payment once the contracts of the four service providers are cancelled and whether a new bid process with new service providers be considered”, says King.

ALSO READ: Report confirms irregularities in appointment of NSFAS service providers


Earlier this year, students across the country voiced their frustrations over the new direct payment system and called for Minister Blade Nzimande to suspend the contracts.

ALSO READ: Nzimande defends NSFAS payment system

The implementation of the new systems had left around thousands of students experiencing a delay in payments.

However Nzimande in a statement in August, back the contracts to the four companies, despite a damning report by OUTA and the SIU and Public Protector looking into the awarding of the contracts.

ALSO READ: Thousands of students not paid allowances

At the time, Nzimande said the four companies fairly won the bid.

“The appointed partners(the four companies) are sponsored by banks that possess commercial banking licences. They additionally have both Payment Association of South Africa licenses and Affiliate Banking licences in order for them to have a sponsored banking license to operate and process payments”, he added.