Ed Partners Africa a Kenyan Startup, a non-banking financial institution that serves affordable private schools has raised $1.9 million in funding in its strive to enhance the quality of education learners receive from low-income communities.
Lydia Koros and David FitzHerbert founded the company in 2018 to enhance access to affordable, quality education in Africa. The company provides loans to private schools that are affordable by bringing access to formal credit to their doorstep.
So far, the company has disbursed a cumulative amount of $1.5 million to 142 schools to reach out to 41,000 students and now aims at scaling the impact after securing support from global social impact investor Acumen, I&P, Zephyr, and existing investors.
“With this additional investment, we will be able to extend much-needed funding to more affordable private schools in Kenya,” said Amos Mwangi, chief executive officer (CEO) of Ed Partners Africa.
The CEO said that the company is focusing 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 the operational insight to lend to this school segment, further exacerbating an already credit-starved sector”, the CEO explained.
He added that Ed Partners aims is to bridge the gap through school-focused lending and via the hub and spoke-based model, where the relationship managers of the company work collaboratively with the school leadership through the entire credit process. The company’s loans are designed specifically for end-users like the purchase of school buses, classroom expansion, building sanitation facilities among others.
“Ed Partners stand on the cusp of exponential growth, and we believe that this current round will enable us to extend financing to the affordable private school segment, which is urgently needed as Kenya emerges from the pandemic”
Ed Partners is the first company to get funding from the education facility recently launched by Acumen. Ed Partners is targeting affordable private schools providing education to low-income populations and charge schools fees between $150 and $500 annually. In addition, these schools seek loans between $2,000 and $70,000 payable within six years. Private schools that are affordable are vital in delivering education to African children. However, historically, they don’t get enough support. In Kenya and across Africa, around 80% of private schools cannot access bank loans.
Investisseurs & Partenaires Deputy Managing Director, Jeremy Hajdenberg, said: “I&P’s investment in Ed Partners marks our growing presence in East Africa, a few months after the launch of our Nairobi-based office. We believe that Ed Partners has the potential to have an important impact on the education sector in Kenya and in the long term in East Africa.”
Bangalore-based Unitus Capital acted as exclusive financial transaction advisor to Ed Partners, while Taylor Wessing acted as legal advisors to the transaction.
