Kampala — Kampala International University (KIU) recently marked out a new path by launching Uganda's first ever university tuition fee loan scheme.

Banking on what appears to be a well thought-out partnership with Orient Bank, a key player in Uganda's blossoming financial sector, KIU has started extending loans to eligible students who previously faced difficulties in paying tuition fees at its campuses.

The problem right now is that many Ugandans mistakenly avoid looking at education as a critical personal investment. They still think it is Government's sole responsibility. That mentality should stop. It is one reason why the government of Uganda has gone on for far too long with the quasi-colonial policy of sponsoring a few students - many from privileged elite backgrounds - at public universities such as Makerere.

Nevertheless, it was refreshing to hear Rukia Chekamondo, the Minister of State for Finance in-charge of Privatisation, say at the KIU tuition fee loan scheme launch that the government of Uganda was contemplating a tuition loan scheme.

This is an idea that I rooted for in The New Vision of October 7, 2008. I suggested that a fund for financial aid to students should be set aside from the national budget.

Speaking at the official launching of the scheme on September 25 at KIU's main campus in Kansanga, a Kampala suburb, Justice George Kanyeihamba, the university's chancellor, aptly captured the hopes and wishes of the people behind this project.

"KIU and Orient Bank are taking a risk, but it is a calculated risk full of honour and promise," he told students, staff and guests.

Banks all over the world dislike risk and recklessness; they try hard to avoid financing projects that could lead to bad debts. Consequently, Uganda has experienced prolonged periods of high interest rates and limited bank lending to private businesses and individuals. Indeed, most commercial banks in Uganda have mainly channeled their lending to Government, whose attractive instruments such as Treasury Bills and Treasury Bonds are virtually risk-free.

However, Uganda's banking industry is maturing quite well. Thanks, in large measure, should go to the competence of Bank of Uganda, the industry regulator. Ever since several local banks collapsed about a decade or so ago, the industry has enjoyed relative stability. This has spawned new and competitive products.

It is truly uplifting to see that banking in Uganda is no longer a downtown main street affair. Many banks operating in this country are going where small savers and borrowers are - in suburban neighbourhoods dotted with small pubs, eateries, bakeries, hair salons, markets, shops and other retail outlets. They are also targeting salaried employees with offers of attractive salary-based loan packages for purchasing things like second-hand cars, plots of land and house furniture.

Now that Orient Bank and KIU have pioneered the tuition fee loan scheme, there is reason to hope that this will significantly boost the development of university education in Uganda. Universities might rapidly begin to build the sorely needed capacity to stimulate a culture of lifelong learning in a country, where the culture of reading is lamentable. With 22 private universities and five public ones, the institutional framework for solid investments in Uganda's education sector is already in place; all it needs is strengthening.

I am, however, sceptical about the government commitment to the tuition fee loan scheme. I base my unease on the experiences Ugandans had some years back with the Entandikwa loan scheme. That revolving fund was a public policy loan initiative by the government to provide start-up capital for citizens to engage in income-generating activities. It was technically designed to help Ugandans deal with the twin problems of poverty and unemployment.

Unfortunately, many recipients of Entandikwa loans apparently misunderstood the purpose of the funds. They thought that they were rewarded for political loyalty to the ruling party; so they failed - or simply refused - to repay loans got through the scheme.

The danger with a government tuition fee loan scheme might arise at the implementation stage. Logically, Ugandans should expect public policy actions that are politically neutral. But politicians have a penchant for assessing every policy proposals in terms of its political impact.

In that sense, goals linked to political objectives like support for particular political parties might overshadow a more noble and egalitarian goal to give all qualified young and older Ugandans a chance to access quality university education.

I am, therefore, hopeful that if the KIU-Orient Bank initiative works well, it should serve as an impetus for many other financial players to underwrite a critical sector that should be placed at the heart of Uganda's long-term quest for socio-economic transformation.

The writer is the head of Mass Communication and a PhD student of Public Management at Kampala International University.