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Universities mull over Sh3b French facility

Local public and private universities have received with mixed reactions a $30 million (Sh3.03 billion) low-interest credit facility that the French government has availed for lending to higher institutions of learning to develop and expand infrastructure.

Last week the Cabinet Secretary for Education Fred Matiang’i signed a Memorandum of Understanding with the France Development Agency (AFD), which will finance the programme.

The signing was done in the presence of French Ambassador to Kenya, Rémi Maréchaux and Principal Secretary for University Education, Prof Collette Suda in Nairobi. The credit facility, which will initially run as a pilot, AFD will set up the Sh3 billion concessional credit line at two local commercial banks.

The funds will be loaned to any local university that will present the most ambitious and complex proposals for funding. To operationalise the fund, the Ministry of Education and AFD will establish a committee that will scrutinise the funding proposals from the local public and private universities. The funds will be given to finance infrastructural investments in areas of science, engineering, technology, agriculture, mining energy, ICT, medicine and others.

“This affordable credit facility will help our universities to modernise their infrastructure without necessarily seeking for money from the exchequer,” Dr Matiang’i said. “The terms are very friendly because the universities will pay an interest of about five to six per cent for a period of 15 years.

We are encouraging both the public and private universities to be prepared to apply for the loans. The universities should start prepared,” said the CS.

While some universities have welcomed the credit facility, others, especially public universities have expressed reservations on whether the low interest loans will be a boon to the cash starved institutions.

“The suggestion looks good but it is unlikely that public universities will take it up. Where will they get the money to pay back the loans even if the interests are low?” posed Dr Charles Maranga, chairman, Machakos University Council. “The best thing the government should have done is to take the credit facility and then give the money as grants to universities to develop infrastructure,” he added.

Dr Maranga said the Module II programme, which is one of the main source of funds for universities is currently not promising because the number of students has decreased after more campuses opened.

“Again, if the loans will be used towards developing infrastructure like labs and buy equipment in Sciences, Technology, Engineering and Mathematics (Stem), it will even be more difficult to raise funds to repay the loans since there are very few self-sponsored students studying those courses,” Dr Maranga explained.

A Vice Chancellor of a public university who didn’t want his name to be mentioned said that while the arrangement is good, universities will find problems in raising the capital to repay the principal and the interest even if the repayment period is long if the funds are tied to science-based courses only. The VC said the money should be availed to fund projects in the Arts-based course since it will be easier to repay the funds.

“We should also be allowed to do proposals to set up industries, where we can train students, offer industrial attachment and have products for sale. Or better still, establish a money-generating ventures — teaching hospitals and mortuaries — that can be used for training at the same time treat patients to raise operational cases,” he added.

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