From Survival to Innovation: How Loan Adequacy Influences STEM Graduates’ Innovation Capacity in Uganda

Abstract

Economic transformation requires Science, Technology, Engineering and Mathematics (STEM) graduates who are innovators and problem-solvers, not just degree-holders. This study explores how student loan adequacy influences students’ capacity for innovation in STEM programmes at Uganda’s public universities. We employed a mixed-methods approach, combining quantitative survey data from 430 STEM students across four universities, 12 in-depth qualitative interviews with university administrators, and eight focus group discussions with 61 student participants. A simple linear regression model assessed the influence of perceived loan adequacy on students’ innovation capacity. The findings indicate that loan adequacy is significantly associated with innovation capacity (β = 0.32, p < .001), although the model explains a modest proportion of variance. The analysis also examined participation in innovation-related activities, including internships, research projects, and entrepreneurial initiatives. Interview participants reported that financial constraints frequently limited engagement in these innovation-related learning activities that contribute to innovation capacity development. For example, many students reported foregoing internships (78%), lacking access to specialised computing resources (65%), or undertaking time consuming income-generating activities to meet basic needs. These constraints may reduce opportunities for practical innovation during university training. Overall, the findings suggest that loan inadequacy may function as an important structural constraint shaping how students allocate time and learning effort during their studies, with implications for innovation capacity development at the student level. Current loan models, therefore, risk supporting programme completion while limiting participation in innovationoriented learning opportunities.