Trustco - Providing Educational Loans in Namibia

HomeTrustco - Providing Educational Loans in Namibia
HomeTrustco - Providing Educational Loans in Namibia

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Jan 21, 2013


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Trustco - Providing Educational Loans in Namibia

Trustco provides educational loans to students enrolled at the Institute for Open Learning (IOL), the largest private distance-learning tertiary education institution in Namibia. Both entities are subsidiaries of Trustco Education (Pty) Ltd., which was established when Trustco Group Holdings (TGH) acquired IOL in 2005. Trustco Finance is located in Namibia’s capital, Windhoek, and has five branch offices and 50 staff. From 2005 to 2011, Trustco Finance registered over 55,000 loans.
Lack of access to education finance is a significant barrier to students and working professionals seeking further education in Namibia. To address this, Trustco Education provides students enrolled in IOL’s distance learning tertiary education courses with direct access to affordable financing through Trustco Finance. IOL offers certificate, diploma, and degree programs in education, business, and information technology, with course prices ranging from $66 (N$500) to $2,123 (N$16,000). While most programs are two or three years in duration, students can be afforded additional time to complete courses. IOL’s six regional Student Support Centers provide students with access to computers and other technical resources if they don’t have access at home. Courses are delivered via pre-recorded video sessions and are supplemented by in-person tutors at the centers. Almost half of IOL’s students are women while 97% are employed full-time.
From 2005 to 2011, approximately 98% of IOL students received loans from Trustco Finance. Trustco Finance borrowers range between 18 and 55 years of age, and are all employed. As of 2011, loans to students
between 18 and 24 years of age comprised approximately 49% of the loan portfolio, while students between 26 and 45 years comprised approximately 47%. Loans to students residing in rural areas made up 77%
of the loan portfolio. The monthly income of student borrowers ranges from $265 (N$2,000) to $3,317 (N$25,000).
Typical loan amounts range from $125 (N$1,000) to $2,500 (N$20,000), with repayment terms ranging from 12 to 60 months and averaging 29 months. Loan repayment begins upon commencement of courses. Interest
rates are set in accordance with Namibia’s Micro Lending Regulations at twice the prime interest rate or, as of 2010, 22% per annum. At times, Trustco Finance is able to offer interest rate discounts as a result
of government subsidies. For example, in 2009, the Development Bank of Namibia provided a $1.78 million (N$15 million) facility that enabled Trustco Finance to offer an interest rate discount of 7% to teachers who
were upgrading their qualifications.
For more information refer to the IFC website

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