The Bank will play an important role in increasing access and improving quality of both basic and tertiary education. This will be achieved through investments in Education projects, Education savings program and efficient management of student loan and bursary schemes.
In October 2015, the Government of Rwanda gave the mandate of management of students’ loans and bursaries to BRD in compliance with the provisions of Law No 44/2015 of 14/09/2015 governing student loans and bursaries in Rwanda. This role was previously undertaken by the Ministry of Education.
click here for law_governing_student_loans_and_bursaries
BRD provides a variety of products and services in the education sector:
1. Student and/or bursaries loans
The Bank provides loans for higher education at both undergraduate and postgraduate levels, and beneficiaries must be studying either in Rwanda or Abroad.
- A student is required to apply to the Ministry of Education through its agency in charge of higher education student loans and bursaries. Currently, the Rwanda Education Board is handles the management of applications and granting of student loans to successful applicants.
- After being granted a loan, a student then signs a contract with BRD for the disbursement and recovery arrangements.
2. Education Investment projects
The Bank finances any project aimed at contributing towards enhancing access and quality of education in Rwanda.
- private investors in the Technical and Vocational Education and Training (TVET);
- selected general secondary education programmes;
- Professional training programmes and higher education;
- Providing support to other levels of education (e.g. Nursery) as long as they contribute to realization of Vision 2020, EDPRS 2 and Education Sector Strategic Plan.
- The scope also includes loans to build schools, purchasing education equipment or education materials, and upgrading existing education related infrastructure.
3. Education Savings
The programme focuses on empowering savings for long term self-sustainability of the tertiary education financing scheme in order to increase enrollment for Post-Secondary Education.
4. Student loan recovery services
The Bank is mandated to recover all mature loans from past, present and future student loan beneficiaries.
- Any loan beneficiary is obliged to declare to her/his employer on whether he/she benefited from a student loan within 7 working days from the first date of employment.
- The employer is on his/her side required to inform BRD about recruitment of a loan beneficiary within 7 working days after the employee’s declaration. The employer also has an obligation to deduct from the employee’s gross salary a monthly repayment installment following the repayment plan agreed upon between BRD and the beneficiary.
- The amount deducted from the salary is deposited on the relevant bank accounts of BRD and the Employer is mandatorily required to make monthly declarations of the repayments made.
- Similarly, any dismissal or resignation of loan beneficiary should be immediately notified by the employer to BRD.
- The Concerned loan beneficiaries – are those who studied abroad or in Rwanda – on Government Student Loan Scheme since 1980, and who have not completed the mandatory repayment.
Key requirements to access BRD loans in the education sector
Student loans: (to sign a contract with BRD)
- A Student should be on the published list of Rwanda Education Board/MINEDUC for students granted loans/bursaries.
- A Student should have a valid student card and registered for studies for the concerned academic year.
- A Student should have a duly filled Student’s Referee Undertaking Form.
- A repeating/suspending/discontinued student does not get access to student loan for the academic year concerned.
- For suspending students, they submit a letter duly signed by their higher learning institutions indicating official acceptance for suspension.
- For repeating/suspending students, their loan/bursary is suspended until they send or their institutions send proof for promotion or reintegration.
Education Investment Projects:
- Feasibility study report for the education project.
- Capacity to manage the project.
- Adequate experience/expertise to manage the education project.
- Adequate market share for the project profitability.
- A minimum contribution varies between 30% and 50% of the total cost of the investment and according to the size of the project.
- In case of expansion, the Bank can finance 100% of the investment needed.
- At least 2 ha of the plot in order to allow future expansion.
Student Loans and Bursaries:
- Undergraduates: the interest rate is 11%.
- Postgraduate students: the interest rate is 12%.
Education Investment Projects:
- Interest rate: 16% applied annually.
- Service commission: 0.75% of the loan requested + 18% of VAT.
- Management fee: 0.5+18% VAT of any disbursed and outstanding loan amount payable on each payment date.
- Grace period: from 6 months to 12 months depending on the period needed.