Operations
19
According to the UN, many
c o u n t r i e s r e g a r d t e c h n i c a l
and vocational education and
training (TVET) as a solution to
their development problems and
encourage young people and women
to undergo technical and vocational
education or training in order to inject
new life into social and economic
development.
In Central America, development
activities have resulted in economic
and social inequalities that have
hindered the fostering of human
capital. Meanwhile, due to the
constraints of traditional concepts
of education, limited household
finances among the economically
d i s a d v a n t a g e d g r o u p s a n d
limited financial resources of local
governments, government policies
on schooling and training have been
ineffective. To solve this problem,
the TaiwanICDF and the Central
American Bank for Economic
Integration (CABEI) signed a loan
and technical assistance agreement
in 2008 to introduce funds and new
financial products to the area, so that
people with growth potential and
those who are open to education
and training could, via the CABEI
financing network, obtain the loan
they needed for education and
learn new skills for the employment
market. After graduation, those who
received proper training would be in
a position to get better employment
opportunities, hence improving
household income.
Under this project, the TaiwanICDF
first provided a loan to CABEI to
jointly establish the "Technological
and Vocational Education and
Training Student Loan Fund." By using
the re-lending approach via banks
and financial institutions with a long
history of cooperation with CABEI,
together the two provide loans to
students enrolled in
technical and vocational
schools or vocational
training centers. Only
after graduation would a
portion of the student's
mon t h l y s a l a r y be
deducted to repay the
loan.
Using an Innovative
Approach to Foster
QualityTalent
Student loan in Central America
is a relatively new financial product
and still in its initial phase. In order
to encourage financial institutions to
participate in the project, specialists
were hired to communicate with
financial institutions and promotional
activities were also held on a regular
basis. Currently there are five
commercial banks in Central America
participating in the project. This well-
received project has proven to be
a success with a surging number
of loan applicants in recent years.
Some countries have even begun
to use their own funds to duplicate
the project model, adapting it to the
characteristics of different education
systems to create tailor-made student
loan programs.
To enable the par ticipating
schools in this project to provide
high-quality educational environment
and curriculum, the TaiwanICDF also
provides technical assistance fund
to the schools that show potential for
development, to update curriculum
and train teachers. Currently there
are 19 schools participating in this
project.
The Student Loan
Project is expected to
have an invigorating
e f f e c t o n C e n t r a l
Ame r i ca . S t uden t s
who are determined to
learn will be enabled to
have a fair opportunity
to receive affordable
quality education.
55
Growth of students
benefiting from project
%
Central America
Student Loan Project
5
Case Study