KENYA – Startup Ed Partners Africa, a non-banking financial institution serving affordable private schools, has raised US$1.9 million in funding as it bids to improve the quality of education received by learners from low-income communities.
Founded in 2018 by Lydia Koros and David FitzHerbert to improve access to affordable, quality education in Africa, Ed Partners provides loans to affordable private schools by bringing access to formal credit to their doorstep.
So far, the company has cumulatively disbursed US$1.5 million to 142 schools reaching out to 41,000 students and now plans to scale that impact after securing backing 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 operational insight to lend to this school segment, further exacerbating an already credit-starved sector”, the CEO explained.
He added that Ed Partners aims to bridge this gap through school-focused lending and through hub-and-spoke based model, where the company’s relationship managers work closely with the school leadership through the entire credit process.
Ed Partners loans are designed for specific end-uses such as expansion of classrooms, purchase of school buses, 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”Amos Mwangi- CEO, Ed Partners
“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. 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 also becomes the first company to receive funding from Acumen’s recently launched Education Facility.
“Affordable private schools in Kenya play an important role in delivering education and can be integral to breaking the cycle of poverty,” said Abdulkarim Mohamed, portfolio manager at Acumen.
“We are excited to support Ed Partners Africa with the first investment from our Education Facility and will work with them to strengthen school infrastructure and improve access to quality education for children from low-income households,” he added.
Ed Partners is targeting affordable private schools that provide education to the low-income population and charge school fees of between US$150 and US$500 per year.
Additionally, these schools are looking for loans of between US$2,000 and $70,000 payable up to six years.
Affordable private schools are an important piece in delivering education to African children. However, they have historically been underbanked.
In Kenya, and across Africa, about 80 per cent of private schools struggle to 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.
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