YFS Case Study No.4: A Partnership to Offer Education Loans to Nursing Students in Uganda

Authors

Taara Chandani, Banyan Global; Wilson Twamuhabwa, Equity Bank (2009)

Abstract

Equity Bank-Uganda and Banyan Global have partnered in Uganda to develop an innovative education loan product that bridges the financial gap for nursing students ages 17-24, who are enrolled at the Mayanja Memorial Training Institute for nurses in Mbarara, Uganda. Throughout Uganda, demand for obtaining a nursing degree is extremely high, yet there is a severe lack of trained health professionals. Access to financial services to help students pay term fees is one of the key barriers to enrollment for potential nursing students. Under the partnership, education loans have been customized to students’ school term and are offered at a reduced interest rate of 2 percent each month (on a declining balance). To date in the pilot, the bank has disbursed 14 loans and is processing over 10 new applications. An additional 68 students have already opened a savings account and are becoming familiar with formal financial services. A key learning point on partnerships that evolved is that it is essential to identify and capitalize on mutual long term interests of each partner and to clearly stipulate the terms of the partnership in written agreements to ensure that responsibilities are upheld. As the program moves forward, the bank aims to replicate this model with other training institutes in Uganda and plans to conduct more extensive market research in the future to adapt other financial services for youth. Banyan Global will continue to offer assistance in linking the bank with other medical training institutes as well as exploring the potential to structure a guarantee to encourage the bank to lend to underserved markets.

Keywords

Banyan Global; Education Loan; Equity Bank; Financial Services; Medical Training Institutes; Nursing Students; Uganda

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