Last week in Rwanda, the Ministry of Education (MOE) announced plans to cut its funding programs for university students in order to funnel that money into primary and secondary education. Currently, Rwanda offers its citizens free1 education through the third year of secondary school for a total of nine years of free education. The remaining three years of secondary school must be self-financed. As a result of this free 9-Year Basic Education (9-YBE), Rwanda has one of the highest primary enrollment rates in the region (92% in 2004). However, this is not a cheap commitment to keep, and in order to continue providing free education, the government has announced plans to cut back on its funding of higher education. In addition to the 9-YBE, Rwanda will also reallocate the funds into its Technical and Vocational Education and Training (TVET). Currently, 25% of the MOE’s budget is spent on the 27,000 students that are enrolled in universities and other higher institutions of learning. The remaining 75% of the budget is used to fund the 2.8 million students that are enrolled in primary and secondary school. Addressing a group of students directly, Dr. Charles Muriganda, the Minister of Education, explained the rationale behind this shift in funding. The MOE hopes that by offering Rwandans at least a basic level of education, the population will have the capacity to create jobs, which may then enable them to pay for their own university education.
Under the current loan program which is run by the Student Financing Agency for Rwanda (SFAR), students can borrow 25,000 Rwandan Francs (RWF)/month (approximately $40) or 250,000 RWF/year (approximately $400). One year at Rwanda’s state university averages $1,200 USD/year with private schools costing as much as $2,000 USD. At the University of Rwanda, 66%, or 7,300, of the students benefit from SFAR loans. In addition to canceling the loan program, the Minister announced that the government’s merit-based scholarship program will be canceled as well. It appears as though the National Assistance Fund for Genocide Survivors (FARG) will still fund scholarships for genocide survivors.
These recently announced changes stand to have a huge impact on the future of the majority of Rwanda’s 27,000 higher education students. Minister Murigande advised the students to use the Christmas holiday to plan how they will meet their living expenses in the coming academic year that begins January 2011. In a country where citizens have limited access to credit, even for income generating activities, the cancellation of these programs could mean a premature end to some students’ educational careers.
Kiva’s new Student Microloans Program hopes to provide another option for these students and their families. On September 20, 2010, Kiva launched the program in three countries: Paraguay, Bolivia, and Lebanon. As the program moves out of its pilot phase, it is Kiva’s hope that over time, Kiva lenders will be able to provide students in even more countries with another option for financing their education. Urwego Opportunity Bank, one of the microfinance institutions that I am working with in Rwanda, is in the process of developing its own Education Loan product that will hopefully help to fill the major financial gap that the Ministry of Education’s decision will create.
1 Although the government does not charge school fees, individual schools charge their students a “motivational fee” which still presents a financial obligation to parents and keeps some school-aged children from attending school.
Iyanna Holmes is a Kiva Fellow working with Kiva’s field partners in Kigali, Rwanda. Join the Urwego Opportunity Bank and Vision Finance Company lending teams today. There are borrowers in Kigali, and many other entrepreneurs from around the world, who you can help by making a loan on the Kiva site.