1. Workshop on Student Loans in Azerbaijan
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

2. Content Briefly about the Fund Partnership with Universities
Works done up to now & Achievements
Eligibility & Loan types
Lending process & Repayment mechanism
Future plans

3. Briefly about the Foundation
Aligned with Government’s Education Strategy
Section 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.

4. Partnership with Universities
Shareholder Universities
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

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 (
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)

6. Lending process: in-kind contributions

7. 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.

8. First real case Narmina Karimova
Born in September, 17, 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
Currently works at a local tourism company

9. 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 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)

10. Loan types By purpose of credit By repayment mechanism of credit
By education level
By study field
Tuition fee
Living costs
Research and Development   
From 2018
Beyond 2020
Fixed-schedule
Income-
contingent  
From 2018
Bachelor's Degree
Master's Degree
Doctoral
degree
Vocational
programs    
From 2018
Beyond 2020
Beyond 2020
All study fields
Also, special study fields based
on labor market demand  
From 2018

11. Tuition fee loans Subsidized package
GENERAL CONDITIONS
STANDARD PACKAGE
PRIVILEDGED PACKAGE
Annual interest rate
8.0% 6%
Grace period (after graduation)
1 year
2 year
Repayment period (after grace period)
5 year
10 year
The debt ceiling that can be taken for one academic year
AZN 4,000
Total debt ceiling that can be taken for whole academic period
AZN 20,000
One-time registration fee
AZN 30
Guarantor or collateral
Not required
CAUSES OF DEFAULT
Grade point average – GPA
Less than 60 (out off 100)
Overdue
More than 90 days
Suspended or frozen education
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

12. Repayment mechanism Academic period (max 5 years) Grace period
Repayment period
(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.

13. Fundraising
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

14. 2017 Agenda – Key issues Strategy Product development
Finalizing strategy paper for 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.

15. Thanks! Workshop on Student Loans
Boulevard Hotel Baku - February 8, 2017