Lead partner: D. Capital Partners (UK)
Partners: Equity Group Foundation (Kenya), Future First Global (UK), Lundin Foundation (Canada) and Mandela Institute for Development Studies (South Africa).
Expected duration: Four years
The Lending for Education in Africa Partnership (LEAP) aims to pilot and scale a non-profit social lending fund dedicated to strengthening economic prosperity in Sub-Saharan Africa by providing affordable higher education loans to students, incentivising their academic success and creating pathways to gainful employment. LEAP’s lending will be directed towards youth from low and middle income backgrounds who are currently unable to secure credit from conventional commercial banks and for whom bursaries and scholarships are not yet available - “the missing middle” of higher education finance.
Financing issues prevent a large proportion of students from enrolling, completing their studies, and choosing courses that enhance employability. The shortage of student financing in Kenya and South Africa alone is estimated at $1.1 billion. Across SSA, only 9% of youth are enrolled in tertiary education (compared to 70% in developed economies). With 15% annual growth in demand for higher education, the accessibility gap is expected to keep widening. No solution has been developed thus far that provides an equitable and scalable student financing model. Existing concessionary funding is limited to scholarship and bursaries that are predominately oriented towards the top 1% of performers or the most-needy, while commercial banks rely on traditional credit methods that limit financing to those with collateral or income records. A few private financing models exist, yet they are limited to students targeting top international MBA programmes.
The goal of this partnership is to build a dedicated non-profit social lending business that will offer affordable student financing for higher education to African youth, especially from low and middle income backgrounds. It will provide student loans to academically qualifying (prospective) students who are otherwise un(der)funded. LEAP’s equitable and scalable student financing model will promote access to employable skills for the SSA labour market while encouraging the growth of relevant higher education programmes.
Over four years, LEAP will disburse higher education loans to 9,000 students in Kenya and Tanzania. The financing made available will be tailored to the specific degrees from select education providers in each country. Upon successful completion of the pilot, the programme will be scaled and replicated within the two pilot countries and in other SSA countries.