Tags: Commitment Pooling, Interest-Free Loans, Sustainable Finance, Community-Based Economics, Islamic Finance, University

A Historic First in Sustainable Community-Based Finance

Lukenya University School of Business and Economics (LUSOBE) has made history by becoming the first university in the world to implement an interest-free student loan system using commitment pooling via Sarafu.Network on Celo Blockchain. Inspired by ancient reciprocal labor traditions and Islamic finance principles—specifically Waqf—the university has launched an innovative digital commitment pool that is set to transform the way students, staff, and vendors access financial support.

LUSOBE Commitment Pool and Voucher Pilot

On February 9, 2025, in Mtito Andei, Kenya, LUSOBE launched its pilot program, training vendors, university staff, and students on the ethical and financial benefits of WAQF-based financing. The system allows users to access resources and credit without relying on interest-based financial models.

This initiative builds on the success of the Resilient Communities Waqf (RCW) project (shown above), which previously piloted commitment pooling models to support shopkeeper credit and community financing in Kilifi County. By integrating these lessons, Lukenya University has established LUKUNI—a university-backed commitment pool supported by an initial endowment of USD 522.51 from Grassroots Economics Foundation (GEF) and RCW.

The Model: A Community-Based Voucher System

At the heart of this model is the LUSOBE voucher, a university-specific financial tool that facilitates credit transactions between students, vendors, and university staff. This voucher system operates within the Sarafu.Network, ensuring transparent, decentralized financial coordination.

How It Works

1. Endowments Seed the Pool – An initial contribution of USD 522.51 kickstarted the system, allowing for credit issuance.
2. Credit Committee Oversight – A dedicated team, including top university officials and faculty from Lukenya University's School of Business and Economics, as well as support from Grassroots Economics Foundation, ensures responsible financial governance.
3. Vendor and User Participation – Select vendors, staff, and students were invited to join the pilot, with 34 active accounts already operational in just three weeks.
4. Transaction Volume – Over 219 transactions totaling KES 204,950 have already taken place, significantly exceeding the 50,000 issued LUSOBE vouchers. LUSOBE holders exchange the LUSOBE among each other and anyone on Sarafu.Network as well as exchange them in the Lukenya University Pool for a zero interest student loan.
5. Scalability and Expansion – With growing demand, more students and staff are eager to join, highlighting the need for additional funding to expand access.

LUSOBE Funds First Interest-Free Student Loan

On February 24, 2025, the Interest-Free Student Loan Facility underwent its first real-world test when Abdullahi, a Lukenya University student, faced an urgent tuition shortfall of KES 10,000 to sit for his exams. Through LUSOBE’s Student Tuition Fee Interest-Free Loan Facility, he was granted an emergency loan, allowing him to continue his education without financial stress.

Incredibly, just five days later, Abdullahi repaid the full amount—demonstrating the model’s viability and reinforcing the principle that students, when given financial breathing space, can uphold their commitments responsibly.

A Future of Financial Resilience

As March approaches, Lukenya University is gearing up for expansion. Plans include:

• Attracting more endowments to expand pool access to additional students and vendors.
• Academic research and documentation to refine and responsibly replicate the model.
• Showcasing LUSOBE at the Lukenya University 10 Million Trees" Marathon, a major event with nationwide media coverage.

This initiative is a blueprint for sustainable, community-based finance, providing an alternative to exploitative loan systems while fostering collective resilience.

Get Involved

If you're inspired by this groundbreaking project and want to support interest-free student loans, contribute to LUSOBE here: LUSOBE Commitment Pool

For more information, contact:

Dr. AbdulHakim Maina – Pool Credit Manager, LUSOBE

✉️Email: [email protected] / [email protected]

Phone: +254 762 682954 | WhatsApp: +254 729 351383

Lukenya University is leading the way in financial innovation—could this be the future of student finance globally? Let’s make it happen!