Private Financing for University Education and Implications on Participation: Evidence From Kisumu County

Abstract

This research project sought to explore the implications of private financing on participation in the university by students from poor households of Ombeyi, Kenya, by finding out the private financing strategies deployed by poor households in financing university education, establishing the determinants of the adoption or non-adoption of particular private financing strategies to finance university education, to determine the relationship between private financing and retention of students from poor households in the university and to establish the role that the government-led financing plays in a students’ participation in the university. This study was framed on the theory of access to finance and development and on the household capital structure theory. The study employed a mixed method design, employing both qualitative and quantitative research. The qualitative method involved the use of interview guides administered to key informants while the quantitative technique involved administering questionnaires to household heads. A total of 58 household heads and 7 key informants were interviewed. The findings of this study show that poor households deploy variant private financing models to ensure retention of their children in the university because the government’s financial aid does not suffice, but plays an integral role nonetheless. These mechanisms include financial aid from relatives, the selling of productive household assets, loans from both formal and informal institutions, fundraisings or harambees and the leasing of their land. Different factors were found to influence particular financing mechanisms including ownership of land for agriculture, supportive relatives, salaries from formal employment that could be used to secure bank loans, the ease of accessing informal loans, and availability of casual jobs especially in the farms and helpful politicians who helped finance students’ university education. 87.9% of them were actually in school at the time of study while 12.1% had been sent home over school fees arrears but 100% of the students from the surveyed households were at the time of the study still enrolled in the universities. All the 58 households (100%) acknowledged the vital role of the government aid in financing their children’s university education and 91.4% of them said that it would be impossible to afford university educational costs without the government aid. Overall, the poor people from this study, would experience difficulty in investing in human capital and for that reason heavily depend on the government funding. But because the government financing is not sufficient, poor households have to go to great extents and deploy variant private financing strategies to compliment the HELB, CDF and CGB, thereby ensuring retention of their dependents in the university. The researcher recommended equity considerations by the government because even poor families are not homogenous. This will reduce the financing gap and also reduce the financing burden among the poor families and increase students’ retention in the universities. Also that financial inclusion of the rural poor should be looked into and that NGOs should consider offering financial assistance to the needy but brilliant students.