MyCredit, a digital credit provider operating in Kenya, has announced a significant funding injection of Sh1.4 billion ($10.7 million) from global impact investors Oikocredit and BlueOrchard. The capital is earmarked to provide tailored financing solutions to Kenya’s rapidly expanding private school sector, addressing a critical need for infrastructure development and educational upgrades.
The funding will enable MyCredit to offer loans of up to Sh10 million per institution, with a repayment period of six years. These funds are intended to empower private schools to invest in a range of improvements, including upgrading existing facilities, adopting modern educational technologies, and implementing environmentally sustainable practices.
“This initiative is strategically designed to alleviate the financial constraints often faced by private schools, thereby enabling them to focus on growth and the delivery of quality education,” stated David Wangai, Executive Director of MyCredit.
Kenya’s private education sector has experienced remarkable growth in recent decades, driven by increasing demand from parents seeking alternatives to the public school system, which often struggles with capacity limitations. Data from the Kenya National Bureau of Statistics (KNBS) highlights this trend, revealing a staggering 773 per cent increase in the number of private primary schools between 2003 and 2017. Over the same period, private secondary schools also saw substantial growth, rising by 216 per cent.
The latest KNBS figures from the 2024 Economic Survey further underscore this expansion. In 2023 alone, the number of registered private pre-primary schools rose to 15,205 from 14,866 in the previous year. Private primary schools surged from 8,838 to 11,739, while private secondary schools reached 1,267, up from 1,255. This growth is attributed to a confluence of factors, including a growing population, heightened demand for quality education, and limitations in the availability of land for public school construction.
MyCredit, licensed by the Central Bank of Kenya (CBK), aims to tap into this dynamic market by offering customised loan solutions. The lender highlights that the funding will cater to the diverse needs of private schools, including investments in essential technology and the upgrading of crucial infrastructure and facilities.
Beyond the general financing, MyCredit’s new facility incorporates a notable green financing component. This aspect seeks to encourage and support private schools in adopting environmentally friendly practices, aligning with broader global sustainability objectives within the education sector.
The investment from Oikocredit and BlueOrchard, both established impact investors with a track record of supporting development in emerging markets, signals growing confidence in the potential of Kenya’s private education sector and the role of digital lenders in facilitating its growth.
MyCredit, founded in 2016 by George Mbira, a veteran of the Kenyan financial industry, has positioned itself as a key player in providing accessible credit solutions. This latest funding round follows a previous injection of Sh460 million ($3.5 million), demonstrating the company’s continued expansion and its focus on addressing specific market needs.
The move is also indicative of the evolving financial landscape in Kenya, where digital lending platforms are playing an increasingly significant role in providing credit to various sectors. The CBK has been actively regulating this space, licensing more mobile phone lenders in recent years, reflecting the sector’s growing importance in the economy.
While the funding is expected to provide a significant boost to private schools, challenges remain within the sector, including ensuring affordability and maintaining quality standards across the diverse range of institutions. Nevertheless, the investment by Oikocredit and BlueOrchard, channelled through MyCredit, represents a significant step towards strengthening the private education ecosystem in Kenya and potentially improving educational outcomes for a larger segment of the population.
The long-term impact of this funding initiative will be closely watched by stakeholders in the education sector, policymakers, and investors alike, as it seeks to address the growing demand for quality education and foster sustainable development within Kenya’s private school landscape.