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Rwanda: IFC to Give $4.8 Million for Private Schools
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The East African (Nairobi)
2 June 2008
Posted to the web 2 June 2008
Mark Kapchanga
The World Bank is to invest $4.8 million in education in Rwanda through the International Finance Corporation.
The Bank, alongside Banque Rwandaise de Développement, will also design a comprehensive advisory programme to help strengthen the financial, management and educational capacities of private schools and develop independent providers of education services.
The initiative will also include provision of advisory services to help the Bank build capacity for conducting due diligence of educational institutions.
Despite a strong demand for private education in Rwanda, most private-school operators do not have access to long-term loans locally. This has greatly hindered their growth. But with the new risk-sharing facility, it will be possible for local operators to access long-term financing and put up additional facilities.
This initiative is modelled on similar facilities in Ghana and Kenya, where IFC has also mobilised local currency financing in support of private education.
The director-general of Banque Rwandaise, Théogène Turatsinze, said the partnership will give the bank an opportunity to expand its support for Rwanda's education sector.
"This initiative demonstrates IFC's effective combination of investments and advisory services in undertaking small-scale projects that have a high development impact," said Thierry Tanoh, IFC director for sub Saharan Africa.
IFC's strategy in Rwanda focuses on mobilising direct investment in key sectors, including tourism, infrastructure, financial markets, agribusiness and construction to maximise impact. It also supports local small and medium enterprises through advisory services, helping build entrepreneurial skills, improve the business climate, and increase access to finance with innovate products such as leasing and trade finance.
IFC's support is expected to boost the government support to get the private sector to invest in university education in the country.
Speaking at Kigali Institute of Technology during a consultative meeting on a new national strategic policy for higher education in April this year, the Secretary-General of the Ministry of Education, Justin Nsengiyumva, urged the private sector to invest more in higher education because it is "a primary tool for development."
Currently, out of the 32 institutions of higher learning, only 14 are private. A draft education policy proposes measures to enable stakeholders to build on already available institutional structures and address social and economic challenges.
Meanwhile, IFC is conducting a course in Nairobi on financial management for private schools as concerns mount over headteachers and boards misappropriating funds in public schools.
The corporation says the Ksh60 million ($953,000) programme will instil stability in local schools as businesses invest in income generating activities and boost their credit risk profile with banks.
The training fits in with the free primary education programme on which the government spends about Ksh9 billion ($142 million) annually, and the more recent subsidised secondary education plan.
IFC has been lending money to private schools for construction, purchase of educational material and other capital costs, with local banks providing the risk cover.
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The approach has already been applied successfully following a partnership between IFC and K-Rep Bank that saw more than Ksh120 million ($1.9 million) extended to the latter in loan guarantees to enable it to provide assistance to schools last year. So far, more than 40 schools have benefited.
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