Nairobi-based Ed Partners Africa, an affordable private schools financing company, has raised $1.9M (Ksh200 million) to expand its presence to give unserved affordable private schools market access to credit. The funds were raised from Acumen, I&P and Zephyr with participation from existing investors.
Ed Partners is targeting affordable private schools that provide education to the low-income population and charge school fees of between $150 (Ksh16,000) and $500 (Ksh54,000) per year. Additionally, these schools are looking for loans of between $2,000 (Ksh200,000) and $70,000 (Ksh7 million) payable up to six years.
Ed Partners CEO Amos Mwangi said 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 said.
He added that Ed Partners aims to bridge this gap through school-focused lending and hub-and-spoke 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 and are designed to sustain the school cashflows and repayment abilities.
Ed Partners, which was founded in 2018 by Lydia Koros and David FitzHerbert, has to date offered $ 1.5 million (Ksh162 million) in loans to 142 affordable private schools, which educate 41,000 students.
Mr FitzHerbert said the funds will catalyse lending to this sector at this critical time when it is recovering 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.
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Ed Partners also becomes the first company to receive 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 across Africa, more than 80% of private schools have never accessed a bank loan and Ed Partners’ tailored products enable the most affordable private schools to invest in quality-improving initiatives.
Success in India
Mike Mbari, Investment Manager, Zephyr Acorn said Ed Partners had improved the quality of education to tens of thousands of pupils in the lower-income segment in Kenya. This investment, he said, is set to positively impact even more schools and pupils in Kenya and beyond. Zephyr has invested in similar successful businesses in India.
Bangalore-based Unitus Capital acted as exclusive financial transaction advisor to Ed Partners, while Taylor Wessing acted as legal advisors.
