Kenyan edtech startup, Ed Partners Africa, an affordable private schools financing company, has raised $1.9 million to expand its presence and enable the unserved affordable private schools market access to credit. The funds were raised from 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 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 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 etc. and are designed keeping the school cashflows and repayment abilities in mind.
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 that the funds will help catalyse lending to this sector at this critical time when the sector 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. 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.
“Acumen is thrilled to have Ed Partners join our portfolio, as the first investment under our recently launched Education Facility. Affordable private schools are an important piece in delivering education to African children, however, they have historically been underbanked.
“In Kenya, and across Africa, 80%+ of private schools have never accessed a bank loan. Ed Partners’ tailored products enable the most affordable private schools to invest in quality-improving initiatives.
“Amos, Lydia, David and the entire Ed Partners team have demonstrated operational excellence, especially during recent school closures. Acumen is excited to work alongside Ed Partners to further support schools in improving the quality of education children receive,” said Abdulkarim Mohamed, Portfolio Manager, Acumen.
Jeremy Hajdenberg, Deputy Managing Director, Investisseurs & Partenaires 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 are proud to support this new investment in the education sector, which makes up one of I&P’s focus areas. Built on a strong social mission, 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”
“We are excited to have Ed Partners as part of our portfolio. Ed Partners has experienced remarkable growth since its inception. By availing financing to affordable private schools,
“Ed Partners has improved the quality of education to tens of thousands of pupils in the lower-income segment in Kenya and this investment is set to positively impact even more schools and pupils in Kenya and beyond. Ed Partners will benefit from Zephyrs’ hands-on approach and experience in the education financing sector, having invested in similar successful businesses in India”, said Mike Mbari, Investment Manager, Zephyr Acorn.
Bangalore-based Unitus Capital acted as exclusive financial transaction advisor to Ed Partners, while Taylor Wessing acted as legal advisors to the transaction.