A Kenyan financial technology company that lends to low-fee private schools is scaling its operations into Tanzania and deepening its presence in Uganda, betting that a credit model tailored to underserved education providers can generate both development impact and commercial returns.
Jackfruit Finance, founded in Nairobi in 2021, has partnered with the global microfinance network FINCA to offer working-capital and infrastructure loans to schools that have long been shut out of formal credit markets. The collaboration, incubated inside FINCA’s Poverty Eradication Lab, is moving from a donor-supported pilot to a revenue-sharing structure designed to prove the model’s long-term viability.
In the Ugandan pilot, 42 schools serving about 10,000 pupils borrowed a total of 184.5 million Ugandan shillings ($49,700) to pay staff, maintain operations and upgrade facilities. Some 91 per cent of the principal disbursed has been repaid to date, according to data shared by the partners. The loans are extended in local currency, shielding borrowers from exchange-rate risk.
The initiative is now entering a new phase: a commercial framework in Uganda with a target of reaching 100 schools, and a parallel pilot in Tanzania that aims to serve up to 70 institutions. Schools begin with working-capital loans and, if repayment records and assessments warrant, graduate to larger, longer-tenor infrastructure financing to build classrooms, improve sanitation or expand student capacity.
“Access to capital remains one of the greatest obstacles for schools serving low-income populations across Africa,” Jackfruit Finance chief executive Robert Alhadeff said. “By pairing our education financing platform with FINCA’s reach and product innovation, we’re creating a model that gives schools the stability and resources they need to grow.”
The partnership is a test case for a broader debate in development finance: whether specialist lenders can sustainably serve the thousands of non-state schools that have proliferated across East Africa as public systems have struggled to keep pace with demand. In Uganda alone, low-fee private schools account for a significant share of enrolment, but they typically lack the audited accounts or collateral that commercial banks require.
Jackfruit Finance uses a technology-driven underwriting process. Loan officers collect operational and financial data through a mobile app, and credit decisions rest on an assessment of a school’s capacity to repay rather than traditional balance-sheet metrics. The company, which already operates a $1.7 million loan portfolio in Kenya, standardises project plans to address the informal cost estimates schools often submit.
FINCA, which operates microfinance institutions in both Uganda and Tanzania, provides on-the-ground regulatory cover, lending infrastructure and customer insight. Seth Spiro, FINCA’s vice-president and chief product officer, said the collaboration was designed from the start to be replicable. “Innovation isn’t about creating more products; it’s about finding solutions that genuinely improve people’s lives and can be replicated at scale,” he said. “Our partnership with Jackfruit has shown that education finance can strengthen schools, benefit students, and create a sustainable model.”
The move to a revenue-sharing arrangement marks a transition away from subsidised pilot funding. While the partners declined to disclose specific financial terms, the shift signals an effort to build a business case that could attract a broader set of investors. Jackfruit Finance raised $2 million in early-stage funding in 2024 from backers including Plesion Capital, VestedWorld and Sherpa Ventures, and has signalled plans to collaborate with development finance institutions and commercial banks as it scales.
Still, the model faces considerable headwinds. Low-fee schools are highly sensitive to household income shocks; fee collection can plummet during droughts, political disruptions or economic downturns. The very small average loan size — roughly $1,200 per school in the Ugandan pilot — raises questions about whether transaction costs can be driven low enough to sustain profitability without ongoing concessional support. And school lending sits in a regulatory grey zone in some jurisdictions, with policymakers at times ambivalent about private education providers targeting poor households.
Jackfruit Finance and FINCA argue that the early repayment data, albeit from a limited sample, provides a credible signal of demand and creditworthiness. The planned Tanzanian pilot, which will need to navigate a different regulatory environment and currency dynamics, will offer a sharper test of the model’s transferability. If it works, the partners intend to use it as a template for further East African expansion.
“We’re not just providing money,” Alhadeff said. “We’re building a structured pathway for schools to grow, and we’re doing it in a way that can eventually stand on its own commercially. That’s the only way to reach thousands of schools, not just dozens.”