Student financing in Kenya has been predominately managed by government run HELB ( Higher Education Loans Board). For students unable to pay their tuition fees in university or technical colleges HELB has been the sole solution provider. Over time, the biggest challenge to the student loans provider has been the inefficient repayment scheme diminishing the fund for the next group of students.
Since July 2015 Student Finance Africa provides students with higher education loans with an interesting approach to data analytics that makes student loans more affordable. According to the Student Finance Africa Site the use of predictive analysis and credit assessment tools help in the process of student selection for loans. After students are awarded with loans, repayment can be deferred till the student is in stable employment and able to pay up. Though the process may seem simple, the data analysis behind it is where the bulk of the work lies.
According to an article in the online magazine Disrupt Africa, SFA “alternative data methods are used to inform these lending decisions, rather than the traditional scoring methods that have served to exclude a significant part of the African population.” Operations and partnerships manager at SFA Claire Blackburn told Disrupt Africa,”we collect data from our educational partners, through our mobile application, and through our online loan application,” Blackburn said. “To date, we have collected seven years worth of historical student data from three different educational institutions in Kenya and Rwanda.”
Using technology to examine study student fee challenges, repayment patterns has allowed SFA to develop a criteria to ensure more students have access to the much need student financing. Student Finance Africa has already worked with 2 pilot programs and continues to offer loans to eligible students. With traditional student financing unable to cater to all needy students, SFA’s emergence in the market is a welcome change to a sector that has seen many students denied financing and eventually dropping out of university due to lack of tuition fees. The start-up tech company hopes to expand its reach in East Africa, having began in Kenya working in partnership with Strathmore University, Trans Union and MetroPol.
According to Disrupt Africa the startup is currently in late-stage negotiations with two educational partners to launch pilots in January 2017 that will see the distribution of loans to over 300 students in Kenya and Rwanda. Being the first private student financing company in the market, Student Finance Africa could make great changes in the sector by providing easy access to financing and empowering more students.
Visit Student Finance Africa for information on how you could benefit from their services.
