The empty half of the basket: Zambia's student-loans board takes a 45-per-cent funding gap to the capital markets

The Higher Education Loans and Scholarships Board has gone to the market with a confession and a pitch. The confession: 45.3 per cent of student-financing need went unfunded in 2025. The pitch, delivered by chief executive Dr John Machayi at the Zambia Capital Market Conference and Awards in Livingstone: banks, pension funds, insurance companies and asset managers should treat student finance as an investable asset class, and help close a gap the treasury cannot close alone.

The board's own growth explains both the confidence and the shortfall. Annual disbursements rose from about K558 million in 2021 to K1.8 billion in 2025, while the loan portfolio grew past K10 billion by June 2026. Recoveries — the line investors will read first — reached about K233.8 million in 2025 and K129.9 million in the first half of this year, with more than 22,000 beneficiaries in repayment by June. Dr Machayi, who also presides over the Association of African Higher Education Financing Agencies, argued that investment in student financing converts directly into labour-market capacity: young people acquire qualifications, and the economy acquires them.

The products on offer are deliberately unglamorous. For commercial banks, Dr Machayi proposed education-financing products tailored to working families — salary-linked repayments, staged payments against verified university costs, and loans bundling tuition, accommodation and learning materials. "Having a salary does not necessarily mean parents can meet university expenses when payments fall due," he said. For pension funds, insurers and asset managers, he floated structured education-financing arrangements — bonds and social bonds among the named possibilities — while taking care to say that no bond issuance or investment commitment has been announced.

The caution is warranted. A student-loan book is only as good as its recoveries, and HELSB's recovery record, though improving, is the soft underbelly of the pitch; Dr Machayi conceded that improved recovery will be important in building investor confidence, and urged employers and beneficiaries to keep repayments timely, since recovered funds support other students. A concept proposal now goes to the HELSB board, then to the relevant government authorities — meaning any instrument is a season away at the earliest. There is a local template: the board's March partnership with Northrise University created a privately seeded loan and partial-scholarship fund with HELSB as manager and custodian.

The political economy underneath is simple enough. Free education at school level has pushed record cohorts toward the ten public universities HELSB serves; the fiscus cannot carry them all; and the capital markets are being asked to price a generation's ambition. Whether they will depends on the recovery numbers — and on whether a degree, in this economy, still pays its own way.

Sources: Lusaka Times, "HELSB Seeks Private Investment In Student Loans" (1 Oct 2026); HELSB statement issued by corporate affairs manager Chiselwa Kawanda (1 Oct 2026); Northrise University–HELSB partnership announcement (Mar 2026); HELSB loan terms as published at helsb.gov.zm.