Kenya has a long history of lending to students; but in the 1980s, the program was
criticized for its poor administration, high costs, and low recovery rates. The establishment
of the Higher Education Loans Board in 1995 ushered in reforms that
have broadened the program beyond the public universities to other postsecondary
institutions and to some students in Kenya’s growing private sector and improved
loan recoveries. This article describes these efforts to improve recoveries and makes
a number of recommendations, including more realistic (i.e., higher) interest rates,
more aggressive enforcement of loan recoveries, more effective targeting (i.e., means
testing), and greater use of banks and other private capital sources. The use of
student loans is an effective tool for increasing participation and equity, although
the government must do more to improve the accessibility of secondary education,
which is where much of the inequity currently resides.