Singapore VC sees potential for education financing in Africa

Halcyon High School in Uganda. Photo source: Amit Jain

SC Ventures, the venture capital arm of Standard Chartered bank in Singapore and Yabx Technologies, a division of Indian technology giant Tech Mahindra, have jointly committed US$10m to Furaha, a platform providing education loans to families in sub-Saharan Africa (SSA).

For many African families, quality education represents one of the largest financial burdens. Parents often lack access to liquidity or short-term borrowing tools such as credit cards or affordable digital loans, making it difficult to pay school fees on time. Missed or delayed payments frequently lead to children dropping out of school, jeopardising their future prospects and, by extension, the development of their communities and countries. This challenge is particularly pronounced for households earning less than US$500 per month.

Founded in 2023 and incubated by SC Ventures, Furaha seeks to address this issue by offering school fee loans, starting with Uganda. The platform leverages Yabx’s AI-powered credit-scoring technology, which uses alternative behavioural data – such as utility payments and mobile network-usage patterns – to assess borrowers’ creditworthiness. This enables banks to extend affordable loans for education. Notably, the loans are disbursed directly to schools rather than families, with repayments made via MTN Momo mobile money wallets. Furaha’s school fee loans are structured as three-month repayment plans.

The demand for education financing in the region is significant. According to data by Global Findex, 54% of adults in sub-Saharan Africa express deep concern about paying school fees, while 29% cite it as their greatest financial worry – ranking higher than medical expenses or paying for old age. In countries such as Kenya and Nigeria, school fees are the most frequently reported financial stressor.

Sending a child to a government school in Uganda costs approximately US$168 and can go up to US$680 to send a child to a privately run institution. Over 60% of adults in Uganda are deeply worried about school fees, and for 40%, it remains their top financial concern. These worries are unsurprising, given that 42% of Ugandans live below the poverty line of $2.15 per day, or roughly $785 annually. Compounding this issue, school fees are typically due at the start of the term, which can pose challenges for families with fluctuating incomes. More than 60% of adults in Uganda are smallholder farmers, whose incomes often fluctuate. They tend to find it easier to pay school fees when they coincide with the period immediately following harvests. The Director of the NTU-SBF Centre for African Studies visited one such school in the northern town of Uganda in 2024 where he saw first-hand the adverse financial conditions under which many of the children receive education. During his visit to the Halcyon High School – a privately run rural school in the northern Ugandan town of Soroti a young female student petitioned the authorities to waive her outstanding dues as her uncle had stopped financing her education.

Evidence suggests that access to education loans can significantly boost enrolment. In Uganda, a provider of home solar systems that offered financing for its systems introduced a school fee loan product based on its customer data. This initiative led to a 50% reduction in the proportion of children out of school, while borrowers increased their education spending by 36%.

 

References

‘The high price of education in Sub-Saharan Africa’, World Bank, 13 March 2023

‘The role of AI in shaping credit scoring in emerging markets’, International Banker, 12 February 2024

‘Furaha: Empowering dreams through quality education’, Furaha Financial, 04 August 2024

‘Unlocking quality and equitable education with purpose-based financing’, Furaha Financial, 21 August 2024

‘LinkedIn post’, Furaha Financial, 2024

‘SC Ventures and Yabx, a Tech Mahindra Group company, invest $10 Million to setup Furaha and expand access to purpose-driven financing in Africa’, SC Ventures, 24 January 2025

‘Frequently asked questions’, Furaha Financial, Accessed 26 January 2025

‘About us’, Furaha Financial, Accessed 26 January 2025

‘LinkedIn post’, Standard Chartered, January 2025