NSFAS News

NSFAS Fintech Partners Contest Contract Cancellations

Published

3 weeks ago

November 1, 2023

Johan

NSFAS Fintech Partners Contest Contract Cancellations. Two fintech partners responsible for disbursing monthly allowances to National Student Financial Aid Scheme (NSFAS)-backed tertiary students are pushing back against the allegations leveled against them and are considering legal action.

Contract Awarded to Four Service Providers

Service providers Coinvest, eZaga Holdings (eZaga), Noracco Corporation, and Tenet Technology were awarded the NSFAS direct payments contract, valued at R47 billion.

NSFAS Board Decision to Cut Ties

However, the NSFAS board recently announced its decision to sever ties with these firms after an investigation into their appointment uncovered potential “conflict of interest.”

Suspension of CEO and Allegations of Bid Evaluation Involvement

Additionally, reports surfaced that the board suspended CEO Andile Nongogo after the investigation found his active participation in the bid evaluation process. The probe also raised concerns about a possible relationship between Nongogo and some of the providers.

Denial of Allegations by eZaga and Tenet Technology

eZaga and Tenet Technology have strongly denied the allegations made against them. They claim not to have received the full report that contains these accusations.

Lack of Transparency

NSFAS Chairperson Ernest Khosa stated that the board provided Nongogo with a copy of the report and also met with the representatives of the four direct payment service providers to discuss the report and its implications. However, Tenet Technology CEO Ryan Passmore disputes the chairperson’s account, stating that they have not received the report and are only aware of media reports regarding the contract cancellation.

Challenge to Unlawful Cancellations

Passmore asserts that Tenet Technology will challenge any cancellation that is unlawful and lacks a valid reason.

eZaga Response and Consideration of Legal Action

eZaga has also expressed its denial of the allegations and frustration at not receiving the full report. They are considering taking legal action against NSFAS to obtain the report and address potential harm to their reputation.

Call for Transparency

eZaga extends an invitation to NSFAS to share the report, emphasizing the importance of transparency and public interest.

Rejection of Relationship Allegations

eZaga firmly denies any alleged relationship with Nongogo and asserts that their interactions with him were professional and aligned with their contract terms. They maintain that these allegations lack substance.

Clarity on Bid Evaluation Process

Regarding the bid evaluation process, eZaga explains that they were awarded the contract through a competitive bidding process and had no undue influence on the selection of winning bidders. They had no prior relationship with NSFAS officials.

Challenges Faced by NSFAS

The NSFAS, an entity of the Department of Higher Education and Training, manages a substantial annual budget of nearly R50 billion, providing financial aid to eligible students at public TVET colleges and public universities. It has encountered various challenges over the years, including IT system failures, mismanagement, and leadership instability.

Impact on Millions of Students

The repercussions of NSFAS issues affect a large number of students and their families. Any problems within NSFAS immediately impact 1.1 million students, along with their parents and siblings, totaling over six million people.

Controversy Over Direct Payment System

The implementation of the direct payment system led to disputes and allegations regarding the system’s functionality, resulting in protests by NSFAS beneficiary students and complaints filed with authorities.

Cybersecurity Threats

Furthermore, the direct payment system faced cybersecurity threats, with attempts by cybercriminals to gain unauthorized access to payment infrastructure.

Resistance and Concerns

In response to these challenges, some institutions, students, and student leaders have shown resistance to adopting the new payment system. Students have also raised concerns about excessive direct payment charges.