Africa-Press – Seychelles. . Applicants can apply for up to R800,000 with their financial institutions
An Education Loan Scheme for people wishing to pursue their advanced or tertiary studies overseas is now open and applicants can apply for a maximum loan value of R800,000 from six participating banks and Seychelles Credit Union.
The scheme was initially announced in the 2023 budget by Minister Naadir Hassan, and last week six participating banks and the Seychelles Credit Union signed a memorandum of understanding (MoU) with the Ministry of Finance, National Planning and Trade to formalise its implementation.
The agreement was signed by the institutions’ representatives and Secretary of State Patrick Payet on behalf of the ministry.
The scheme, which is part of government’s investment for the future, is now under way and yesterday the director general for Financial Services Development Division, Odile Vidot, outlined its implementation.
Speaking at a press conference at the Care House building, Ms Vidot said its aim is to provide an additional option to the traditional access to tertiary education through the Ministry of Education for those who want to develop their skills based on the country’s needs.
“The scheme is not replacing or changing any existing scholarship system done through the Ministry of Education but rather complements them, giving people another option to have access to advanced studies, for example if they are not getting access to the scholarship or they want to finance their own studies,” she explained.
It should be noted that some financial institutions were already providing education loan. However, Ms. Vidot said that government wanted to explore other options and propose loans that were more accessible and affordable for the citizens.
“We have agreed on a maximum sum of R800,000 based on two criteria; firstly what we noticed when analysing the general cost of courses in different countries, was that the majority of them, except for the medicine and dentistry fields, the sum would cover a full three-year degree course in countries like Mauritius and Malaysia,” she said adding the second consideration was the repayment upon their return, so as to ensure it was affordable and not be a burden on them.
Ms Vidot explained that the loan carries an interest subsidy of 4 percent, which will be provided by the government, with a repayment period of ten years maximum.
“So if for example a financial institution was charging 9 percent, the government will pay 4 percent and the individual will cover the remaining 5 percent,” she said.
The loan is also fully guaranteed by the Seychelles government and it is not compulsory for the applicant to make a personal contribution.
According to the ministry, the degrees, professional courses and diplomas that would be considered under the scheme will have to be for courses aligned to the country’s human resource development strategy, thus driven towards areas of projected increased opportunities for growth and development.
So far over 40 eligible courses have been identified and these include Information Technology, Accounting & Finance, Tourism, Agriculture and Fisheries among others. All courses will have to be vetted by the Seychelles Qualification Authority to ensure quality of the institutions and courses, prior to disbursement.
According to the ministry, students can borrow in their own right, meaning there is no need for compulsory co-borrowers. Ms Vidot explained that the borrowers would be required to be bonded to the Republic based on the value of the liability for government in relation to the subsidised rates.
“The students would not need to commence repayments on their loans until they have graduated and are in receipt of their degree, certificate or diploma. In the grace period, the government will cover and disburse to the lending institution its interest rate subsidy, however, the balance student borne interest would be capitalized,” explained Ms Vidot.
For its part, the Seychelles Bankers Association said the scheme is open to individuals aged between 18 and 55 years old, taking into consideration the retirement age, which is 65, and the repayment of ten years. The association’s chairperson, Philippe Moustache, urged the applicants to seek more clarification about the scheme with their specific bank and advised them that the loan will be disbursed only to the institution that is accredited and which approves their application.
The six participating financial institutions are Absa Bank Seychelles Ltd, Al Salam Bank Seychelles, Bank of Baroda Seychelles, Mauritius Commercial Bank (Seychelles) Limited, Nouvobanq (S.I.M.B.C.), Seychelles Commercial Bank, and Seychelles Credit Union.
The government has budgeted R8 million in the 2023 budget for payment of the interest rate subsidy under the Education Loan Scheme, which according to Ms Vidot can cater for around 200 candidates.
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