Rwanda: BRD Pushes for Penalties for Student Loan Defaulters


The Development Bank of Rwanda (BRD) is pushing for reforms to the law that governs the students’ loan scheme in order to increase enforcement of penalties to defaulters.

Since it was created in 1980, the student loans scheme has been managed by multiple institutions including the Ministry of Education and its affiliated organisations such as Rwanda Education Board (REB) and the defunct Student Financing Agency of Rwanda (SFAR). This has at times made the loan recovery process difficult.

To enhance efficiency, the management of the scheme was moved to BRD in 2015, which says has encountered numerous recovery challenges hence affecting the disbursement of more loans.

As of January 2021, the Bank had recovered Rwf24.4 billion out of the outstanding Rwf221.85 billion.

The number of loan beneficiaries is 139,925 whereas only 18,626 have cleared their loans, which represents just 13.3 per cent.

The number excludes the disabled and the deceased whose loans were either waived or written off.

Edward Byaruhanga, BRD’s Loan Manager, attributes the little success to the law governing student loans and bursaries.

He explains that article 22 and 23 of law 44/2015 of 14/09/2015 governing the student loans and bursaries stipulates the sanctions for staff and institutions that do not comply, but does not clarify which next steps should be taken.

“The law is not really supportive because when borrows don’t pay back, there is no law to enforce the penalties,” he noted.