Amos Mwangi, CEO of Ed Partners Africa, has a wealth of experience in the education finance sector. He officially began working for Ed Partners in June 2018 after playing a key role in its founding in early 2018. His consulting work on market scoping, feasibility studies, market research and product development ultimately led to the formation of Ed Partners.
Ed Partners is a non-banking financial institution in Kenya that works with affordable non-state school owners to provide financial and non-financial solutions. Their portfolio is exclusively comprised of education finance products, and they are currently lending to 400 schools in the Nairobi, Nakuru Meru, Nyeri and Kisumu areas in Kenya. Ed Partners has recently engaged Opportunity EduFinance to collaborate on technical assistance training and market research to develop their vision for the future and other education products.
We spoke with Amos Mwangi to learn more about his background in education finance and his recent experience of building and leading Ed Partners and collaborating with Opportunity EduFinance.
What is Ed Partner’s mission?
Our mission is to improve access to affordable quality education. We do that by providing financial and non-financial solutions to affordable private schools. While other Financial Institutions just look at providing loans, for us its more of a partnership – that’s why we are called Ed Partners. We don’t disburse and walk away. We want to ensure that we are improving the education environment within a school, as well as other areas such as financial management, human resources, and leadership.
We want to see a successful school and to us, a successful school is one that has been able to impact a high number of children and improve its education quality. Education quality improvement is a long-term investment that takes time to demonstrate. I believe with more partnerships, engagements, and support for these schools, we will see an improvement in numeracy and literacy learning outcomes.
Why are you personally interested in education finance and lending to school owners and parents?
I’m deeply interested in the kind of impact education has. Education is a tool that empowers families, communities and nations and gives people chances to improve their lives. It’s something that can make the child of a poor person sit at higher tables and change the fortunes of their families. There are many ways of intervening and improving livelihoods – entrepreneurship, microfinance, etc, but the role of education is quite critical as far as economic transformation is concerned.
Looking at the significance of education spending in households, education ranks third as far as households’ spending is concerned. First, they take care of food, then rent, and then education. From our market experience, we see households spending upwards of 30% of their incomes on education. This means that they value education and look at it as a tool for socio-economic transformation.
It is something that has not been directly supported before in the way Ed Partners is doing it . Ed Partners is the first non-banking education finance company in Africa. I’m very happy to be at the forefront of this, both starting and leading something new, which will impact millions of children, and turn around the fortunes of our continent.
What was your own experience of education when you were growing up?
I grew up in the upcountry in Kenya like many other children. My parents were farmers and their cash-crop was coffee. I was quite passionate about my education and I did well in both primary and secondary school. My mother really inspired me and would always talk about the power of education; you may not have a large inheritance, but with education you can go anywhere in life. I am a beneficiary of education; I believe in the power of education which I acquired through the support of my parents. My mother’s passion for education has continued and she still follows how my children are doing in school.
I imagine children like me, who did well academically, but who were unable to continue with education due to various challenges such as lack of school fees. There were also others who were not admitted to schools with the right quality of education. I feel that connection to give quality education to children so they can continue with life and achieve their dreams.
How did you start working in microfinance?
I started my career in banking in 2002 after I completed my Bachelor’s Degree in Commerce (Accounting) and my passion was to work within the banking sector. I had a passion for the way banks intervene in the economy, distributing capital and allocating from people who have, to those who do not, through financial intermediation.
I started off as a credit officer at Equity bank, then grew to become a Credit Manager and a Relationship Manager. After working for 7 years in commercial banking, I felt that I needed to transition into something more impactful, so I went back to college and did my Masters in Banking and Finance, specializing in Microfinance. After my graduation, I was recruited by Faulu Microfinance Bank to support the bank to roll out a range of individual lending products as part of its transformation strategy. Later, I grew within the ranks to become General Manager, Business Development. I am happy to note that I negotiated and entered a partnership (which was among the first ) with Opportunity EduFinance to introduce education finance products in Kenya.
When I left Faulu I jumped into the consultancy space specializing in my areas of passion one of which is edufinance. One of my clients was Ed Partners and together with another consultant, we did education finance assignments in terms of market scoping, feasibility studies, and product development, which formed the foundation of Ed Partners. As the lead consultant, I was offered an opportunity to operationalize the business which I accepted and I have never looked back.
How have you found the process of working with the Opportunity EduFinance team on technical assistance?
I have a good relationship with Opportunity EduFinance. I worked with Julius Omoding before when I was working at Faulu. I have a good understanding of how Opportunity works. It’s quite engaging and fulfilling to work with a team that is so aligned with its mission and vision. In the past, we have worked with people who are mainly interested in achieving their own objectives or ticking boxes, but I have seen that the Opportunity EduFinance team is dedicated, committed, and genuinely interested in transforming the education finance space. It is a team that is willing to work with you and deal with strategic pieces that need to be handled to ensure mutual success.
What would be your advice to another Financial Institution that was considering lending to schools, parents, or teachers?
I would advise them to get it right first. Opportunity EduFinance is what I would call an education finance think tank. They know what needs to be done, they understand the market very well, and they have a lot of knowledge to share. Personally, I would encourage anyone who is thinking to start in education finance, to work hard and partner with Opportunity EduFinance – there will be less room for mistakes when you work with people who know what they’re doing.
Have you developed new education products as part of technical assistance?
Currently, we are conducting market research to check whether there is demand and whether a school-fee finance product is feasible within the Kenyan market (for Ed Partners). We know it has succeeded in other jurisdictions, but we want to see what Kenyan parents might be looking for. We hope that the insights that we draw from the market research should be able to help us to take the next steps.
In addition, we are thinking about other non-financial needs like school management systems and how we can support the schools to address the same through affordable fit-for-purpose solutions that work. We have noted that less than 5% of schools have a working school management system. We, therefore, have a role to educate the market about the benefits of such a system in terms of reducing admin costs and improvement in cash flow. We are looking at several initiatives aimed at collecting more data to help us develop more products for schools, parents, and students in order to improve the entire education ecosystem.
Finally, as a business, we are aware of the fact that expansion into new geographies will require the development of new solutions e.g. financing clean energy – to cut the cost of firewood that is used for cooking and heating and conserve the environment.
What do you think could be future funding opportunities?
Currently, the funding for education finance is not that high. We would want to see more funding directed to this sector through sustainable mechanisms. We need more long-term capital and better pricing to meet the needs of affordable private schools. We also need to think about how we can adopt technology for purposes of scaling the solutions like school fee financing for parents. We also need a conducive environment as far as regulations are concerned to ensure this space keeps growing.
What do you hope for the future of education?
There are a lot of changes occurring in the Kenyan education space. The country is transitioning from the old curriculum, which was more aligned with passing exams, to a new Competencies Based Curriculum (CBC) which is focusing more on developing competencies for the future and for global competitiveness. I would hope and pray that we continue working on our education system, to improve it, and align it with international benchmarks. I also hope that more funding will be dedicated to education, whether its public donations or private investments. This is particularly necessary as Kenya’s future will be determined by its education system.
Read our blog interview with Helen Musyoka, a School Leader in Machakos County, near Nairobi, Kenya.