The Association for Savings and Investment South Africa (Asisa) on Tuesday confirmed that it will be closing the Fundisa education unit trust fund at the end of March 2023, saying the fund no longer incentivises investors to support the education of children from low-income households.
The low-risk, interest-bearing unit trust fund, which has been in existence for almost 15 years, was launched by the former Association of Collective Investments (ACI) in partnership with the Department of Higher Education and Training (DHET) and the National Student Financial Aid Scheme (NSFAS) to assist with funding for the tertiary education of students from lower-income households.
However, with NSFAS expanding its mandate in 2018 by phasing in fully subsidised bursaries for disadvantaged students from families with an annual household income of R350 000 or less and the Ikusasa Student Financial Aid Programme (ISFAP) providing bursaries to students from families with an annual income of R600 000 or less, the demand for Fundisa’s existence has dwindled.
Realising the imminent closure of the fund, the association took the decision to halt the application of new investors to Fundisa in February 2018.
The fund, which applies a household income means test of R180 000 for beneficiaries and accepted a minimum investment of R40, included a unique bonus offering where investments in the fund were enhanced by up to 25% annually to a maximum of R600 per beneficiary.
Since inception the fund has allocated R48 million in bonus payments to investor accounts.
Asisa CEO Leon Campher says that the 10 963 investors who are still investing in the fund on behalf of low-income households have eight months to conclude investments.
“Qualifying investors would have received their share of the 2021 bonus allocations of R1.2 million last month and we are giving them eight months’ notice that the Fundisa fund will be closing for new contributions at the end of September 2022 to ensure that no one is prejudiced,” Campher says.
He adds that those who continue investing will receive their bonus payments for the year.
“While we cannot force investors to use this money for what it was intended, namely to fund a child’s education, we hope that people will do the right thing,” he added.