Exploring the Role of Qard Hasan Educational Loans in Expanding Access in Higher Education: A Case Study of Tanzanian Educational Development Trust (TEDT)

Abstract

Qard Hasan is commonly discussed as a benevolent, interest-free financing instrument, yet considerably less attention has been given to the organizational capabilities required to sustain it as a mechanism of higher education finance. This study examines the Tanzania Education Development Trust (TEDT) as a developmental diagnostic case of Qard Hasan educational lending. Drawing primarily on NAMA Foundation organizational assessments conducted in 2023 and 2025, supplemented by TEDT-related organizational and loan-operational materials, the study develops an Ethical Educational Finance Capability Chain comprising four interdependent capabilities: ethical legitimacy, access governance, reciprocal accountability, and capital continuity. The assessments are treated as organizational diagnostic evidence rather than independently verified measures of institutional performance or educational impact. Cross-temporal analysis indicates documented strengthening in strategic and operational planning, organizational risk management, financial risk management, and financial management systems. Capital continuity nevertheless remains the principal sustainability-design challenge. Because TEDT operates through a nonprofit, non-commercial Qard Hasan model, continuity cannot depend on interest income or conventional commercial returns. Instead, it relies on repayment recycling, institutional and funder support, credible reporting, risk control, funder confidence, diversification, and deliberate capital-renewal arrangements. The study therefore advances an institutional interpretation of Qard Hasan in which ethical non-commerciality does not reduce the need for organizational discipline, but increases the importance of governance and capital architecture. Tanzanian financial regulation is treated as a boundary condition within which these capabilities operate. The contribution is diagnostic rather than impact-evaluative: the study does not establish that TEDT has increased higher education access or achieved repayment success, but identifies organizational conditions under which Qard Hasan educational finance may become institutionally credible and durable.