Affordable private schools will have a reason to smile after the Nairobi-based Ed Partners Africa, a school financing company, raised $1.9million (Sh205 million) for private schools in the region.
The funds which were raised from Acumen, I&P and Zephyr with participation from existing investors are part of the company's approach to expand its presence and empower the unserved affordable private learning institutions market access to credit.
Ed Partners is targeting affordable private schools that provide education to the low-income population and charge school fees of between $150 (Sh16,000) and $500 (Sh54,000) per year.
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Additionally, these schools are looking for loans of between $2,000 (Sh200,000) and $70,000 (Sh7 million) payable up to 6 years.
Ed Partners’ CEO Amos Mwangi announced that the company is concentrating on Kenya’s affordable private school sector which is typically starved of credit by mainstream lenders.
“Affordable privates schools have found it extremely difficult to access formal credit due to arduous application processes and limited collateral. Mainstream financial institutions lack operational insight to lend to this school segment, further exacerbating an already credit-starved sector,” the CEO stated.
The Ed Partners, he said, strives to bridge this gap through school-focused lending and a hub-and-spoke model where the company’s relationship managers work jointly with the school management through the entire credit process.
Ed Partners loans are meant for specific end-uses such as an expansion of classrooms, building sanitation facilities, purchase of school buses and are designed to support the school cashflows and repayment abilities.
Ed Partners was founded in 2018 by Lydia Koros and David FitzHerbert and has to date offered $ 1.5 million (Ksh162 million) in loans to about 142 affordable private schools, which educate close to 41,000 students.
Mr FitzHerbert stated that the funds will catalyse lending to this sector at this critical time when it is healing from COVID-19.
“We are excited to have Acumen, I&P and Zephyr show their faith in Ed Partners and its vision to improve access to credit to affordable private schools in Kenya,” Fitzherbert said.
Ed Partners is the first company to get funding from Acumen’s recently launched Education Facility.
“Affordable private schools are an important piece in delivering education to African children, but have historically been underbanked,” said Abdulkarim Mohamed, Portfolio Manager, Acumen.
In Kenya and Africa in general, more than 80 per cent of private schools have never accessed a bank loan. Ed Partners’ tailored products are designed to enable the most affordable private schools to invest in quality-improving initiatives.
Success in India
Zephyr Acorn, Investment Manager, Mike Mbari said Ed Partners had improved the quality of education to tens of thousands of schoolchildren in the lower-income segment in Kenya.
This investment, he noted, is set to positively impact more schools and pupils in Kenya and beyond. Zephyr has invested in similar thriving businesses in India.
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