I am honoured to contribute to the current debate on NSSF Bill. In this article, I propose a solution to the current standoff over the NSSF Bill before Parliament. The Bill should be withdrawn first and redrafted afresh because considering its current state, the chances of it being passed are very minimal.
The Fund members won’t benefit from the internal discord among the two committees handling the Bill. Without dwelling much on the issues in the two committees, it is clear that the finance committee is on one extreme end and the social security committee is on the other opposite extreme end.
The solution I am proposing is meant to bring the two committees in the middle. NSSF fund won’t be touched, but the people will still get money and relief. I propose that NSSF issues a certificate called loan certificate/certificate of saving/certificate of credit to savers, who are 40 years and above.
This certificate can then be presented to the bank to get a loan. This certificate should be recognised just like a bond security, land title, car log book, etc.
Any person who is 40 years and above, but below 45 can get a loan of up to 10 per cent of current total savings and any member who is 45 and above can get a loan of up-to 20 per cent of his/her current total savings.
To further help ordinary citizens, the interest tagged to this “NSSF Loan” can be capped at say 13 per cent just like the agriculture loan, which attracts a small interest. In this new Bill all banks should be required to open as soon as possible this new loan facility at all their branches called “NSSF Loan.”
It is clear that NSSF is worried about giving out money. Granted. Now in this proposal, NSSF will only issue a certificate, I hope NSSF will find this very attractive and convenient. This will resolve the current stalemate.
The loan certificate/certificate of saving/certificate of credit, should contain the following particulars: The member’s name, date of issue, current total savings, time of issue and date of birth. This certificate should be an asset and once presented to the bank, the bank should recognise it has a viable security just like a house.
This certificate should have NSSF seal and it should be given free of charge to members and the processing should be a maximum of two days. It can be designed in such a way that this type of loan automatically comes with say four months holiday before repayment begins.
Now just like any other loan and loan security, once one defaults, the loan will keep accumulating until 50 years. Then the NSSF will pay the bank the accumulated amount off the defaulters savings balance. Also if one defaults for more than a year, then the bank tags NSSF.