Higher Education in Kenya is one item that is gradually showing up in expense lists for more households. In post independence Kenya through to the late 80s, higher education was a privilege for few people and back then, high school graduates (A-Level) were the only people who would access university education. Most of the cost was footed by the government back then.

In the recent days, Kenya has seen a growing demand for tertiary education, with a steady rise in enrolment and an increase in private universities to 21 in 2008 from 3 in 1985. This could have been necessitated by push for literacy levels and the highly competitive job market resulting to people wanting to get a higher level of education to be ahead of competition. The spiral result of it is that a university degree has become the primary requirement for employees in the country.

According to statistics, out of 411,783 candidates sat for the 2011 KCSE, 119,658 scored C+ and above hence qualified for university admission. Due to space constraints in Kenyan public universities, only 41, 000 will be admitted on government sponsored programs out of the lot. This leaves 65.73% of qualified graduates to find an alternative way of accessing university education.

Private universities in the country and provisions by public universities to offer Privately-Sponsored Programs (Parallel Programs) come in to carter for the deficit. This programs give opportunities to those candidates who did not initially meet the C+ cut off mark to upgrade their education through diploma and then degree levels.

Financing Solutions

On average in the country, a university degree (without sponsorship) cost about KES 85,000 per semester. This translates to an average of about KES 680,000 for an 8 semester degree course spanning a period of between 3 to 4 years. This is an amount many Kenyans cannot afford to pay cash every 3 or 4 months and therefore there is need for financial solutions to the same.

The government through an Act of Parliament in 1995 established the Higher Education Loans Board (HELB) to administer Students Loans Scheme for public sponsored students. In recent times, HELB has been giving loans to both private and public sponsored applicants.

Several commercial banks have developed products towards addressing education financing but the products are still few on the market. Prevailing high interest rates on loans fueled by high inflation rates the country has seen in the last 1 year has made some of these products inaccessible. Some of the products include KCB Bank's Masomo Loan. This is a partnership between KCB and HELB targeting working class undergraduate and postgraduate students in both public and private universities.

Others are Somesha (Education Loan), available to clients who are existing members of Opportunity and have serviced at least one of the two, low weekly savings loan, Msingi or Nguzo loan (savings of 15% of the required loan payable in 12 months).

In 2008, IFC, a member of the World Bank Group partnered with Commercial Bank of Africa and Strathmore University to introduce a student loan product. This product was designed to reduce financial burden on students at Strathmore University, including those from lower- and middle-income families who are eligible to attend university but cannot pay the entire tuition costs upfront.

IFC said in a statement that once the pilot project established, new products will be offered, including loans with repayments deferred until students find jobs. Similar products will also be introduced at other universities in Kenya, with the aim of extending student loans up to KES 1.1 billion shillings ($16.9 million equivalent).

The table below shows some of the Loans Available for Education on the Kenyan Market.

[caption id="attachment_18846" align="aligncenter" width="762"] Table of available Education Loans in Kenya[/caption]