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Strathmore University
Student Loans Scheme
To address Kenya's need for a new generation of leaders from all
economic classes, Strathmore is working on a
project to create innovative private sector loan
financing. The goal: financing of 50% of the need for 50% of the
students. Nothing would be more transformational for
Strathmore and its students. Beyond the benefit to Strathmore, the
project could pioneer such funding techniques for the entire private
education sector. Friends are needed to help provide baseline
funding to help more of Kenya's best attain the Strathmore
experience.
How to help?
1 full scholarship for 1
year:
$2700.00
Equity to back 10 student
loans: $5400.00
4 years of interest subsidy for 1 loan: $1900
to $2600
Equity to back 1 student
loan:
$540.00
How to contribute? Click
Student Loans
Scheme
Possible
Terms
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Facility |
Strathmore
University Private
Sector Student Loans Scheme |
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Facility
Description |
A revolving loan credit
facility in support of qualified
Strathmore
University
students. |
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Facility
Entity |
A Special Purpose
Company, perhaps called “Strathmore University Student Loan
Agency Trust”, organized like a trust, governed by independent
trustees and administered by a leading first-class Kenyan
bank. |
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Possible Facility
Entity Details |
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Equity |
Up to $500,000, provided
by:
- $250,000 by
multilateral, bilateral, and institutional providers,
and
- $250,000 raised from
independent sources by Strathmore University
Foundation.
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Debt |
Up to $2.5 million in
Kenyan shilling equivalent, by way of a long-term revolving
facility funded by local Kenyan banks. |
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Potential Entity
Guarantors |
An appropriate
first-class multilateral or bilateral
agency. |
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Facility Arranger
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A first-class Kenyan
Bank, perhaps in conjunction with an appropriate international
bank or agency. |
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Possible Individual
Loan Details |
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Borrowers |
Strathmore
University students
admitted to the University with high school results of A- or
better. |
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Individual Borrower
Amount |
Up to $5400 in
Kenya
shilling equivalent, being 50% of total
Strathmore
University tuition
costs over four years. |
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Individual Loan
Tenors |
Calculated as a
percentage of borrower’s post-education salaries (starting at
least at KSh20,000 per month and growing 5% p.a.) resulting in
loan repayments generally of between 9 and 12 years, depending
on individual
circumstances. |
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Individual
Drawdown |
Up to 25% of total
amount in each of four years during students’ university
career. |
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Grace
Period |
Five years (to
provide for four years of schooling plus one year of
employment seeking and getting
settled). |
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Individual Loan
Repayments |
In installments of
equal percentage of between 25% and 33% of borrower's gross
salary, commencing at the end of the fifth year after
graduation. |
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Individual Loan
Interest Rate |
Blended Bank Base
Rate plus a margin of 2% p.a. (Current Bank Base Rate is
estimated to be between 9% and
10%.) |
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Interest Rate
Subsidy |
An amount totaling
the difference between the market rate for consumer loans and
the Individual Loan Interest Rate, to be provided by either an
appropriate agency of the Kenyan Government, international
agency, or a private
philanthropy. |
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