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Universities find innovative ways to finance hostels

With Kenyan public universities experiencing a severe shortage of accommodation brought about by rapid expansion of student numbers and elevation of middle-level colleges into universities, one institution has come up with an innovative public-private partnership to build 3,000 hostel units.

Murang’a University College, until three years ago a technology college but now under the umbrella of Jomo Kenyatta University of Agriculture and Technology, is partnering with the county government of Murang’a and micro-lender Jamii Bora Bank to build student rooms.

Other institutions have also been forging public-private partnerships to tackle the student hostel crisis, with financial institutions, property developers and landowners being roped in to meet the unprecedented demand for accommodation across urban areas.

Universities have been unable to keep up with student hostel needs through investment in physical facilities. But with students living in unsanitary and even slum-like conditions in some cases, universities are racing against the clock to solve the problem in order to remain competitive in terms of attracting students.

“The Murang’a county government has entered into a KES1 billion (US$11 million) partnership with Jamii Bora Bank for the construction of more than 3,000 hostel units to accommodate over 10,000 students,” said area governor Mwangi Wa Iria.

“We are calling on investors to take this rare opportunity.”

Under an arrangement that could be replicated across the country, the bank will provide financing of up to 90%, with a grace period of up to 18 months and a repayment period of 10 years. Investors will provide land for hostel construction and raise 10% of the funds required.

For its part, the county government will provide prototype building plans, access roads and water and electricity, and is promising to waive all fees and rates related to the construction. The university will ensure an enrolment of 10,000 pupils, and collect rent and remit it to the investors.

Dominic Makawiti, vice-chancellor of Maseno University, said times had changed and universities should no longer be expected to provide accommodation for students. “Our role is to teach,” he said.

The vice-chancellor said his institution was offering hostel rooms to students on a first-come-first-served basis upon full payment of fees, owing to the limited space available.

Ratemo Michieka, council chair of Kenyatta University, said institutions would have no choice but to follow the example set by Murang’a University College.
“Private-public partnerships are what universities must now seriously explore if they are to provide housing for rising numbers of students.”

Universities, he added, must be allowed to concentrate on their core duties of teaching and research while investors provided physical facilities such as housing, in order to ensure that access to higher education is expanded.


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