Ed Partners Africa Raises Ksh 205 Million To Fund Affordable Private Schools

Nairobi-based Ed Partners Africa, an affordable private schools financing company, has raised US $1.9m (Ksh205 million) to expand its presence and enable the 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 for 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 a 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 the 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 catalyze 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.

“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” said Jeremy Hajdenberg, Deputy Managing Director, Investisseurs & Partenaires