Crowdsourcing Student Loans
In 2012, Kiva, a micro-lending platform, partnered with Strathmore University in Kenya to provide tuition loans to low-income students through crowdfunding. The initiative aimed to address the systemic problem of inequality in Kenyas higher education system, where access is largely dependent on socio-economic background. Kiva raised funds from individual lenders, which were then distributed by Strathmore University to selected students based on academic performance and financial need. The program offered three types of loans: full-tuition, partial-tuition, and laptop loans, each with different terms and interest rates. From 2012 to 2018, Kiva raised USD 762,675, benefiting 84 students with an average loan of USD 9,004. However, the program ended in 2018 due to a high delinquency rate of 14.65%, as many graduates struggled to find jobs and repay their loans.
Pros
Increased access to higher education for low-income students who otherwise couldnt afford tuition fees
Offered flexible loan options to cater to different student needs (full-tuition, partial-tuition, and laptop loans)
Utilized innovative crowdfunding approach to raise funds for education
Provided a grace period for full-tuition loans, allowing students to focus on studies before repayment
Cons
High delinquency rate (14.65%) due to graduates struggling to find jobs and repay loans
Limited scale, with only 84 students benefiting over six years
Sustainability issues, as the program ended after six years due to repayment challenges
Potential financial burden on students if unable to secure well-paying jobs after graduation
Partners
Kiva
Strathmore University