Banks Set Aside Billions for Scholarships as Schools Set to Reopen

Top commercial banks in the country have set aside a share of billions earned in profits for the year ended December 31 to support needy students as schools are set to reopen in two weeks’ time.

A sum up by one local daily shows close to 5,000 students are expected to benefit from the initiative, with Equity Bank’s ‘Wings to Fly’ taking a lion’s share of 2,000 beneficiaries.

The lender is expected to spend close to Sh2 billion for a four-year programme.

The scholarship programme has successfully facilitated over 37,000 beneficiaries in the past 12 years to access quality secondary school education, an initiative of the Equity Group and Mastercard Foundation. 

KCB Foundation scholarship and the Cooperative Bank Foundation Scholarship Scheme will benefit close to another 2,000 students.

The second biggest bank in terms of asset value, KCB Group, recently increased its sponsorship to 1,000 students annually from 240, with 10 percent of the slots given to persons living with a disability.

In 2022, it channelled Sh262 million towards students joining form one.

This year, the Cooperative Bank Foundation has granted over 655 full secondary education scholarships, pushing the number of beneficiaries since its inception, in 2007, to more than 9,000.

In the 2020/2021 financial year, the lender spent more than Sh158 million on the education programme.

According to Co-op Bank Group managing director Gideon Muriuki, the scholarships are awarded on merit to gifted but needy students from all regions of Kenya.

“Co-operative Societies, who are the face of Kenya, identify well-performing students from disadvantaged backgrounds and bring these names into a regional forum where delegates debate and select the most deserving cases,” Muriuki says.

Other lenders in the country with the school scholarship initiatives include Family Bank and Stanbic Bank who are expected to spend at least Sh30 million each for the programme. 

Local banks continue to play a huge role in the government’s agenda of achieving universal education by 2030, with several coming up with education credit plans. 

Every year, banks receive close to 200,000 scholarship applications from students with an average score of 350 markets out of 500. 

Local banks are expected to post strong end-of-year earnings if the past three quarters are anything to go by. 

In Q3, Equity Group reported Sh34.4 billion, KCB Sh30.6 billion while Family  Bank and Stanbic recorded Sh5.1 billion. 

Fitch Rating’s latest Kenya banking sector outlook shows Return on Asset (RoA) for top banks in Kenya will rise from 3.5 percent to five per cent while Return on Equity (RoE) will improve by 80 basis points from 23.8 percent.

The average total capital adequacy ratio (CAR) for the larger banks peaked at its highest level over the past four years (end-2021: 18.8 percent; end-2020: 18.5 percent).

“The large banks’ capitalisation will remain stable, supported by robust pre-impairment operating profitability,” Fitch said.