South African pilots social impact bond for low-interest student loans

South Africa is piloting a social impact in an attempt to make education more affordable after student protests over tuition hikes that most middle-income families can’t afford.

The government has raised 200 million rand ($15 million) to begin piloting its Ikusasa Student Financial Aid Programme for 2,000 students in 2018.

The program will offer low-interest loans to university students from families earning less than 600,000 rand per year who are enrolled in high-demand subjects like engineering and mathematics.

Low-yield bonds issued to savings depositors will fund the program.

Photo credit: CNN

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