Download The Maarifchi Student Loan Foundation

The Maarifchi Student Loan Foundation:
what have been done up to now and future plans
Workshop on Student Loans in Azerbaijan
February 8, 2017
Boulevard Hotel Baku
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Content
1. Briefly about the Fund
2. Partnership with Universities
3. Works done up to now & Achievements
4. Eligibility & Loan types
5. Lending process & Repayment mechanism
6. Future plans
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
3
Briefly about the Foundation
 Aligned with Government’s Education Strategy
− Section 3.1.7.of the Education Strategy Action Plan commits to “5.14. Financial
mechanisms for the expansion of educational opportunities, including the creation
of a system of student loans.”
 Established in October, 2015 as a non-governmental organization
− The Maarifchi (Enlightenment) Student Loan Foundation has been established to
design, develop, and oversee a new student loan scheme in Azerbaijan.
 Mission
− The Foundation's mission is to provide free and equal access to the higher
education through the provision of concessional loans for the students from low
income families.
 Based on good practices
− Foundation was established based on sound analyze of wide practices around the
world and in close consultation with World Bank.
 Governance
− The Foundation is governed by a Supervisory Board composed of representatives
from the ten HEIs and one representative from the Ministry of Education.
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
4
Partnership with Universities
 Shareholder Universities
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Azerbaijan University of Languages
Azerbaijan State Economic University
Azerbaijan State University of Oil and Industry
Azerbaijan State Pedagogical University
Azerbaijan University of Architecture and Construction
Azerbaijan Technical University
Baku State University
Baku Slavic University
Ganja State University
Sumgait State University
 Partner Universities
11. Lankaran State University
12. Khazar University
13. Azerbaijan State Agricultural University
14. Azerbaijan State University of Culture and Arts
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
5
Works done up to now
 Internal documents
− Application and selection procedure
− Guideline on allocation and monitoring of in-kind study places by Universities
− Template contracts (Student loan contracts, University partnership contracts, etc.)
 Responsive website (www.maarifci.az)
− Online inquiry and chat
− Online application system
 Loan Portfolio Management System (Phase I)
− Student accounts to follow debt status, as well as historical and future payments
− Automatic periodic notification system
− Robust reporting system
 PR activities
− Over 10 interviews with leading news agencies
− Many articles in websites
− Promo activities (Wallpapers in universities, etc)
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
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1
Universities submit info on available
study places for coming academic
year to the Foundation.
2
Based on available study places, Foundation
announces application session.
STUDENT
FOUNDATION
UNIVERSITY
Lending process: in-kind contributions
4
3
Foundation evaluate
applications, select
eligible students.
Student apply online via
Foundation’s website.
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
8
Upon receipt of a copy of
Student-Foundation loan
contract, University close
Student’s debt per tuition fee.
7
Upon receipt of registration
fee payment, Foundation
informs University and
provides copy of StudentFoundation loan contract.
Selected students are invited
to the Foundation for
5
contract signing.
6
Upon contract signing,
students make payment
transfer per registration fee
to Foundation
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Achievements
In total, after 2 application sessions, 90 student from 14 university were selected and
signed 103 contract in the amount of 183,177 AZN.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Total
University
Founder universities
Azerbaijan University of Languages
Azerbaijan State Economic University
Azerbaijan State University of Oil and Industry
Azerbaijan State Pedagogical University
Azerbaijan Architecture and Construction University
Azerbaijan Technical University
Baku State University
Baku Slavic University
Ganja State University
Sumgait State University
Partner universities
Azerbaijan State Agrarian University
Azerbaijan State Culture and Art University
Lankaran State University
Khazar University
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
Number of "in kind"
places allocated
150
25
33
5
16
16
7
7
8
18
15
27
5
2
10
10
177
Number of
applications
174
19
45
4
14
17
9
22
19
17
8
6
1
4
1
180
Deemed
Number of
appropriate vacant places
100
51
10
15
33
5
8
8
10
6
7
7
8
14
5
3
12
3
24
5
1
1
1
9
1
9
103
75
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First real case
 Narmina Karimova
− Born in September, 17, 1994. Her father was a veteran of
the Karabakh war.
− Became a student at the Azerbaijan University of
Languages in September, 15, 2012.
− Applied to “Maarifchi” Student Loan Foundation and
was the first student to whom the tuition fee credit has
been granted.
− Graduated from Azerbaijan University of Languages on
2016
− Currently works at a local tourism company
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
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Eligibility
 General requirements
− Be a citizen of the Republic of Azerbaijan;
− Currently study at one of the higher education institutions which is the founder or
partner of the Fund;
− Be in real need for financial assistance to continue education;
− No default on loans previously taken by him/her or by his/her parents (failure to
timely payments on debt obligations or to fulfill other terms of the loan).
 Special requirements (per tuition fee loans)
−
−
−
−
−
−
−
−
Annual income level of family (max 10.000 AZN/pa)
The student’s age (max 25)
The education level (Bachelor's Degree)
Type of education (day classes)
Course (from the second academic year)
Study field (covers all fields)
Grade point average – GPA (above 70 out of 100)
Academic Arrear (should not have any academic arrears)
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
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Loan types
 By purpose of credit
Tuition fee

Living costs
 By repayment mechanism of credit
Fixed-schedule

Incomecontingent
 By study field
All study fields
Research and
Development
From 2018
Beyond 2020

Master's
Degree

From 2018

Doctoral
degree

Vocational

programs
Beyond 2020
Beyond 2020
Also, special study fields based
on labor market demand

From 2018
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017

From 2018
 By education level
Bachelor's

Degree

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Tuition fee loans
GENERAL CONDITIONS
Annual interest rate
Grace period (after graduation)
Repayment period (after grace period)
The debt ceiling that can be taken for one academic year
Total debt ceiling that can be taken for whole academic period
One-time registration fee
Guarantor or collateral
CAUSES OF DEFAULT
Grade point average – GPA
Overdue
Suspended or frozen education
STANDARD
PRIVILEDGED
PACKAGE
PACKAGE
8.0%
6%
1 year
2 year
5 year
10 year
AZN 4,000
AZN 20,000
AZN 30
Not required
Less than 60 (out off 100)
More than 90 days
Yes
 Subsidized package
− In case of the death of the family breadwinner.
− Students who lost parents or do not have physical or legal custody over them
− Student with impaired functionality
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
12
Repayment mechanism
Academic period
Grace period
Repayment period
(max 5 years)
(1-3 years)
(5-10 years)
 No payment during Academic and Grace Periods.
 Interest is calculated and capitalized during these periods, meaning it will be added
to the principal, when the grace period ends.
 Any payments made during the academic or grace or repayment periods, will lower
total outstanding amount.
 Grace period can be prolonged up to 3 years upon submission of evidence such as
military service or disability.
 No additional bank commission or payment fees is paid.
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
13
Fundraising
2016
2017
2018
2019
2020
In-kind contribution from HEIs
Private sector's scholarship programs and donations
International Donor Agencies and Education Funds
Contributions from Government and Speical Funds
 Beyond 2020
− Educational debenture bonds sold to socially responsible investors
− Equity injection by international finance institutions
− Private capital market securitization backed by the student loan assets
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
14
2017 Agenda – Key issues
 Strategy
− Finalizing strategy paper for 2017-2020 in consultation with Ministry of Education,
World Bank, Universities and other key stakeholders
 Product development
− Developing framework of income-contingent repayment mechanism and support
for first-year students (who lack the funds to enroll in higher education) in
consultation with relevant Government agencies.
 Monitoring and control
− Cooperation with credit bureaus for better information sharing and integration
− Development of loan risk rating and segmentation of students based on credit
worthiness (low, medium, high) to ensure that the portfolio’s risk profile is balanced.
 Fundraising
− Identifying international donor agencies to attract additional resources for loan
scheme and developing donations & scholarship programs with involvement of
local private business.
Workshop on Student Loans in Azerbaijan
Boulevard Hotel Baku - February 8, 2017
15
THANKS!
Workshop on Student Loans
Boulevard Hotel Baku - February 8, 2017