Rwandan Students Now Get Scholarship Loans from Bank, Reports KT Press

    KIGALI, RWANDA, April 17, 2015 /24-7PressRelease/ -- Rwandan students will no longer apply for scholarship loans from the government; but rather, through the Development Bank of Rwanda (BRD).

Education Minister, Silas Lwakabamba, said that this will increase the number of loans issued and enable the recovering of Rwf82 billion issued since 1980.

Only Rwf10 billion has been recovered. "We have been doing business which is not ours," said Lwakabamba.

Now, a student, with a guarantor, will sign a contract with the bank for tuition, living allowances, research, and travel allowances for those studying abroad, at an interest rate of 11%.

After getting employed, a student will then begin paying the loan, but the government will not be involved in the recovery process.

The development will solve a problem that has existed for decades. For example, funds have been coming from the finance ministry to the central bank, and then to the account of the Ministry of Education, which sends it to their respective colleges' accounts before it is transferred to students' accounts.

This makes a student wait after three months for the loan.

On April 12, students addressed the matter to President Paul Kagame, who directed Minister Lwakabamba to resolve the issue immediately.

Two days later, a cabinet meeting chaired by President Kagame, approved that effective September this year, all students will apply for a loan at BRD, ending the misery.

Loan criteria

Before 2008, all students who met the pass mark were automatically awarded a full scholarship. Since then, with number of students having increased from 3,000 to 87,000, the government, citing budget constraints, requested parents to share the burden.

Students were then classified according to level of wealth of their families. Category 1 and 2 get a flat Rwf 600,000 ($850, then $1000) per year, plus a monthly stipend of Rwf25, 000 ($35). Category 3 and 4 are entitled half of the scholarship loan. No support to category 5.

With this development, Minister Lwakabamba said, the government will be depositing 100% of its offer into the bank.

The government will deposit Rwf 29 billion ($40 million) for local students, and Rwf11 billion ($15 million) for students studying abroad, every year for 10 years. After then, Lwakabamba said, the bank "will handle it and sustain it."

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