Sunday, April 14, 2024

New York Firm To Launch Kenya’s First Mobile Student Loans


A New York-based private equity with interests in a hostel project at Kenyatta University is set to launch Kenya’s first digital mobile student loans targeting young women.

The Christie Company, through its African investment arm – Africa Integras – is spinning off Girls First Finance, a mobile app, to tap the unbanked college-going women in the region through digital student loans.

“Girls First Finance is a new student loan initiative targeting young women, also men but priority is on girls first who might be economically vulnerable but still need access to financing their education,” Andrea Christie Pizziconi, founder and managing principal of The Christie Company said on the sidelines of the credit infrastructure for sustainable growth conference held in Nairobi last week.

Andrea Christie Pizziconi in a panel discussion during the credit infrastructure for sustainable growth conference held in Nairobi last week.

Currently, thousands of university students from low income families rely on State loans issued by Higher Education Loans Board (Helb) but many more miss out as the agency grapples with cash shortfalls.  This is due to poor recovery from past beneficiaries and sluggish capitation from the exchequer which saw Helb last month warn that over 100,000 eligible students would got without loans in the remainder of the current academic year.

Through the student loan app, users will also access personal and professional development tools, including mentorship, wellness and financial planning.

“We’ll launch it here (Nairobi) in March, around the International Women’s Day (marked on March 8). We’ve decided that the population we’re targeting will all start from the same place in terms of credit score. Most of such unbanked girls from low-income households have no credit profile whatsoever and it’s precisely because of this that lenders often shun them. That’s where we come in. Having no credit profile does not necessarily mean you’re a bad borrower,” said Pizziconi.

Kenya has witnessed an explosion of digital loans with more than a dozen micro-lenders entering the country’s credit market in response to sky-high demand for quick loans, especially among youths.

Africa Integras a few years ago signed a partnership deal with Kenyatta University (KU) to construct a $57 million (Sh5.7 billion) dormitory to house 10,000 students. The project, whose construction is set to start this year after delays, is expected to ease the accommodation squeeze currently experienced at the university.

Africa Integras, which is focused on developing education infrastructure projects in Africa, says on its website that the KU hostel project will include kitchenettes, leisure facilities, cafes and study areas.

Kenyan career investment banker John Ngumi, who sits on various company boards, is the managing director for Africa Integras East Africa and is in charge of transaction negotiations in the region.

 “After the March launch (of the student loan app) when we’ll start receiving applications, it will then take six months for users to use a pilot monthly budget and prove their behaviour of their credit history. So we may not have a credit score from credit bureaus but we can look at how users have managed their budgets for the six months and establish whether or not they’re responsible,” said Pizziconi.

“The best part is that the app comes with several tiers of support, mentorship, wellness support, meet-ups, as well as support in getting jobs.”

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