International Finance Corporation (Washington, DC)
14 July 2008
press release
Nairobi — IFC, a member of the World Bank Group, is partnering with Commercial Bank of Africa Ltd. and Strathmore University in Kenya to introduce a new student loan product.
This will reduce the financial burden on students at the university, including those from lower- and middle-income families who are eligible to attend university but cannot pay the entire tuition costs upfront.
Kenya has seen a growing demand for tertiary education, with a steady rise in enrollment and an increase from three private universities in 1985 to 21 in 2008. But a quarter of eligible applicants are denied admission because they are unable to pay tuition upfront.
The Commercial Bank of Africa will manage the overall program, which will consist of a 280 million Kenyan shillings ($4.5 million equivalent) portfolio. Strathmore will contribute funds to cover potential initial losses on the loan portfolio, and IFC will provide a structure to reduce the remaining risk. The loans will be priced at 12 percent a year and will cover annual tuition. Repayments will be in equal monthly installments over a 12-month period, enabling students to meet annual tuition costs. The loans will also provide the university with a stable flow of funds.
Once this pilot is established, new products will be offered, including loans with repayments deferred until students find jobs. Similar products will also be introduced at other universities in Kenya, with the aim of extending up to 1.1 billion shillings ($16.9 million equivalent) in student loans.
Isaac Awuondo, CEO of the Commercial Bank of Africa, said, "The proposed facility, the first for Kenya and the region, will demonstrate that financing education can be profitable. It is in line with our strategy to be at the forefront of product innovation within the financial services sector. This partnership with Strathmore and IFC is a step in the right direction toward achieving our business strategy."
Professor John Odhiambo, Vice Chancellor of Strathmore University, said, "The project will make higher education more accessible for students of all income levels and help attract academically superior students who are unable to meet tuition costs."
Jean Philippe Prosper, IFC Senior Manager for East Africa, said, "IFC strives to do more to expand access to finance and improve lives in Kenya. This project creates a link between local financial institutions and universities, using private sector innovation to improve educational opportunities."
Guy Ellena, IFC Director for Health and Education, said, "This student loan program will help distribute the economic benefits of higher education more evenly by increasing access to university education for students from lower- and middle-income backgrounds, opening the door to better jobs."
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC's vision is that poor people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.
For more about information IFC's partners, please visit: Strathmore University, www.strathmore.edu
Commercial Bank of Africa, www.cba.co.ke
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Hallo Sir,
Am Astudent at Daystar University but currently out of school due to fees. I ought to have graduated with the class of 2008 but this was not posible due to financial challenges as the story below. Kindly cionsinder cases similar to mine .Thanks
PERSONAL PROFILE DUNCAN ISAAC LIVMBATSI MAHANGILU ST NO: 06-1393.
My Name is Duncan Isaac Livmbatsi Mahangilu born on 21st January 1972 at Gaigedi village, Vihiga District of Western Province in Kenya. I am the last born to Mzee Jeremiah Mahangilu and Mama Leah Nyagoha in a family nine. I started school in 1978 at Gaigedi Primary school when my Daddy had only two years before retirement from Kenya Railways. I knew Christ in the year 1985 while in standard Seven and ever since God has manifested his Love and Grace in my life
Our family migrated from Nairobi and went to settle on my father’s two-acre land in the rural area. Life became a struggle to us as my father worked hard to meet our school fees and to sustain the family. The only source of income for us came from our small tea farm. In addition, my Dad had to sell all his domestic animals to raise school fees for my brothers and sisters who were in Secondary Schools. Two of my brothers never managed to complete Secondary Education due to lack of fees. Those who managed to attend secondary school didn’t score good grades as a result of the harsh environment that we were experiencing.
I sat for my Kenya Primary Certificate of Education exams in 1988 and scored 50 out of 62 points but didn’t manage to join a Government School due to lack of school fees hence I joined a Community Secondary School. Towards the end of my 4-year learning, our school was affected by tribal land clashes that escalated in most parts of the Rift Valley and the entire country. Most of us (the non Kalenjins) were forced to evacuate for safety thus we could not attend classes because of the heightened tension. The Kenya Certificate of secondary education examinations were interrupted and halted for two weeks due to leakage. The Government and the Kenya National Examination Council had to re-set another exam for us. However, I managed to score third (3rd ) division grade.
In 1992, I moved to Nairobi and I lived with a relative as I searched for employment. The only job that people with my qualifications could secure was manual lobour in construction firms. I made a decision and began working with a construction company for two years until 1994 when I got a job with a computer services’ firm in Nairobi town. Splinter Commercial College was my employer for two years where I served as a cleaner cum messenger. During this period I used part of my wages to do short courses in salesmanship’s and computer packages.
Consistently in prayers, God gave me a job with Daystar University on January 1996 as cleaner cum groundsman. My hope for education advancement was rekindled to serve the University because it had provisions for staff development policy. Before my dream came to pass, retrenchment came. The Management Board decided to do away with the none-core businesses where by I was among the staffs marked to go in October 2003. My final dues after retrenchment total to KShs 146,000 (one hundred and forty six thousands).
In 2004 April, I got admission to Daystar University (Student Number 04/0107) to pursue a Diploma Programme in Management and Development. I raised my fees from the money I was paid in lure of the service to Daystar University with the help of a sponsor from the US. As part of my attachment project, I worked with Food for the Hungry International-Kenya (FHI) in June to September 2005. I graduated in June 2006 with a Diploma in Management and Development. After completion I immediately enrolled for the Bachelors of Arts in Community Development during the June Blocks (Student Number 06-1393). Unfortunately, my sponsor fell sick due to heart related complications hence unable to support me. After my attachment with FHI they gave me a contract of 1-year to serve as a Community coordinator cum facilitator. During my stay I found an opportunity to serve the poor and the needy in Kibera, Mathare, Korogocho, Kayole and other slums in Nairobi. I worked diligently as if working for God. I am proud to have made a difference to the needy for that one year up to when my contract ended in February 2007.
The Registrar Daystar University Box 44400-00100 Nairobi.
April 25, 2008
Dear Madam,
Re: Application for A scholarship
Greetings in Jesus Name our Lord and Savior.
I hereby apply for a scholarship to facilitate the continuation of my education at Daystar University that has stalled due to the heart complication related disease that has affected my sponsor since August 2006.My Admission No is 06-1393 for a BA in Community Development programme.
Kindly, I do request for your assistance and prayers even as I endeavour to fulfill my dream of attaining servant leadership training and education to transform our communities. Attached, find a copy of my profile.
Thank you and Gods blessings as you serve.
Duncan Isaac Livumbatsi Mahangilu
C.c Finance Manager Financial Aid Officer Liaison Officer