Future of Work Fund

Intervention

Social or environmental challenge

The Education Commission costing model (2016) estimates a $25B gap in the demand for financing tertiary education in Africa. This gap follows current government spending and foreign aid initiatives and highlights an urgent need to develop solutions that can be embedded in the private sector.

Student lending faces similar challenges to those of SMEs. The financial need is too large and long term for MFIs but too small and too risky for traditional banks. Accessing loans to finance tertiary education is particularly difficult for women and those from lower income families without collateral to guarantee loans. Student lending is considered very high risk, particularly given the proliferation of low quality programs.

There is a critical need to align the outcomes and incentives for key stakeholders in addressing youth unemployment and ensure access to high quality, market relevant tertiary education under terms that are fair and ethical.

Description of the intervention

Chancen International is a social impact organization focused on the intersection of education, livelihoods, and financial inclusion in Africa, with a particular emphasis on empowering women. Through its FAIR and ETHICAL solution known as the Chancen Income Share Agreement (ISA), Chancen provides financing to traditionally excluded populations to enable access to high-quality education that leads to employment.

In 2021, Chancen launched the Future of Work Fund 1.0, a $21M blended investment vehicle designed to finance 10,000 youth in Rwanda, Kenya and South Africa by 2025. Through this innovative financing mechanism, incentives are aligned such that returns to investors are healthy when traditionally marginalized youth are successful in transitioning into meaningful employment.

Chancen has already achieved a first close of $11 million in commitments and has a pipeline of education providers that would lead to approximately $5 million in ISAs disbursed annually. We have noted an increasing interest for investment into this structure and in parallel have developed a strong pipeline for growth in both South Africa and Ghana. We are requesting funding to support the feasibility, design and implementation of our next large round of financing which will support expansion in these two markets.

Last data update

Data for this pipeline project was last updated in July 2023