Chancen International provides income-contingent loans to students in Rwanda to help them overcome financial barriers to tertiary education.

Chancen International offers Income Share Agreements’ (ISAs) to students in Rwanda to help them secure finance for tertiary education. ISAs are essentially income-contingent loans, whereby students borrow the funds needed to fulfil their studies, and then repay the loan once their income passes a minimum threshold. Once their income is above €21,000,  repayments are started and a small percentage is paid back to the fund over a 25-year period. This flexible approach means that students don’t need to worry about payments in times they are not working, for instance if they pursue further studies or take parental leave.

For high-income earners, a percentage based repayment system may mean that they pay back more than the original sum borrowed, however the total repayment is capped at twice the value of the original loan. These additional payments become a system of ‘paying it forward’ by increasing the funds that can be lent to future students.

Having access to ISAs has two key benefits. Foremost, it ensures that students can go to university based on their merit rather than their background or wealth, therefore making it a key tool for reducing domestic inequalities. Second, it means students don’t need to take out high interest or risky loans.

Chancen International is a subsidiary of Chancen EG, which has been offering ISAs to students in Germany for over 20 years. The first cohort of Chancen International participants were 420 female students in Kigali who commenced their studies in September 2018. Sixty percent of these students came from rural areas.

Why you should care

In Rwanda, both public and private universities and vocational colleges charge tuition fees, which may be up to €1,500 per year. This presents a significant financial barrier for students from low socioeconomic backgrounds, who often live off as little as €2 per day. By providing access to ISAs, Chancen International is breaking down these financial barriers and creating opportunities for social mobility through education, particularly for women.

How the Global Goals are addressed

Quality education

ISAs can improve access to tertiary education for all, regardless of gender, ethnicity or socioeconomic status, by eliminating financial barriers.

Reduced inequalities

Access to quality tertiary education through low-risk finance can mitigate inequalities of opportunity and outcome, particularly for female students.