Varsities to get cheap loans for expansion
What you need to know:
- The subsidised loan will also help curb the growing interest rate burden on universities brought by rising appetite for commercial bank debt that is mainly used to acquire buildings for satellite campuses.
Kenyan universities will access cheaper loans at interest rates capped at seven per cent from a Sh3 billion fund to expand their facilities amid a puff up of student population.
The Ministry of Education and the French Development Agency (AFD) have inked a deal to open a $30 million credit line for the construction of new campuses, research facilities, lecture halls, hospitals and hostels.
The subsidised loan will also help curb the growing interest rate burden on universities brought by rising appetite for commercial bank debt that is mainly used to acquire buildings for satellite campuses.
The funds will be deposited in two undisclosed local banks for lending to private and public universities.
“The concessional loans of between six and seven per cent is one way of encouraging universities to modernise facilities and accelerate the country’s innovation pace,” Education Secretary Fred Matiang’i said on Thursday in Nairobi during the signing ceremony.
Universities will submit project proposals to a joint committee of the Education ministry and AFD for funding approval.
The seven per cent interest on the loans is significantly lower than the prevailing average rates of about 18 per cent that commercial banks are charging.
