This comes after the Cabinet directed that from September this year, all students will have to apply for a loan at BRD and not the Students Financing Agency (SFAR) run by the Rwanda Education Board.
The scheme has a fund of Rwf29 billion ($40 million) for students in local universities and Rwf11 billion ($15 million) for students studying abroad.
Under the new arrangement with BRD, a student will be required to find a guarantor and sign a contract with the bank for tuition, living allowances, research, and travel allowances for those studying abroad, at an interest rate of 11 per cent.
Beneficiaries will be expected to repay the loan within 15 years upon employment.
Loan arrears
Specifically, the government is banking on Atlas Mara’s BRD Commercial Ltd to help it recover over Rwf70 billion ($98 million) in arrears on student loans through SFAR since the 1990s.
“BRD commercial will only be handling part of the loan scheme, including recovery,” said Konde Bugingo, chief executive of Atlas Mara’s commercial section of BRD.
The new deal comes after Atlas Mara officially announced this week that it will be investing $22.5 million in Banque Populaire du Rwanda, which could make it the country’s largest bank by branch locations and second largest bank by assets, with combined assets of approximately $305 million.
Atlas Mara Ltd owns 77 per cent of BRD following its acquisition in 2014.
The East African
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