Nairobi-based private schools financier Ed Partners Africa has raised Sh205 million ($1.9million) to provide credit facilities to underserved affordable private schools.
The funds were raised from Acumen, I&P and Zephyr with additional participation from existing investors.
Ed Partners is targeting affordable private schools that provide education to low-income populations with school fees of between Sh16,000 ($150) and Sh54,000 ($500) per year.
It is also looking to lend to learning institutions that are looking for loans ranging from Sh215,000 ($2,000) to Sh7.6 million ($70,000), payable in up to six years.
Ed Partners CEO Amos Mwangi said the company is focusing on Kenya’s affordable private school sector, which is typically starved of credit by mainstream lenders.
“Affordable private schools have found it extremely difficult to access formal credit due to arduous application processes and limited collateral. Mainstream financial institutions lack operational insight to lend to this school segment, further exacerbating an already credit-starved sector,” said Mr Mwangi.
He added that the organisation aims to bridge this gap through school-focused lending and through a hub-and-spoke based model where the company’s relationship managers work closely with the school leadership through the entire credit process.
The loans are designed for specific end-uses such as expansion of classrooms, purchase of school buses, building sanitation facilities, among others.
Ed Partners, which was founded in 2018 by Lydia Koros and David FitzHerbert, has to date offered Sh162 million ($ 1.5 million) in loans to 142 private schools educating 41,000 students.
Mr FitzHerbert said the new funds will also help to catalyse additional lending to the sector which is seeking to recover from the negative effects of Covid-19.