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The Fund is open to all types of financial institutions or Education Finance Schemes (i.e. institutions which are either public financing institutions or schemes for education and/or Special Purpose Vehicles set-up with the intent of on-lending REFFA funds to the target population) in Africa that have an interest in catering for the educational sector. The Fund’s partners and investors place great value on responsible banking practices such as good governance, socially responsible finance, client protection principles and social and environmental standards.


For participating financial institutions, tailoring services to the education sector by providing education loans and savings products has the following advantages:


  • Excellent opportunity to reach out to new clients and serve existing clients better through a range of new products

  • First-mover advantage over competitors by offering a new set of innovative financial services in a market segment with clearly growing demand

  • High potential for “cross-selling activities”, particularly for savings products



Generally, the Fund is open to financial institutions operating in African countries. To be eligible, participating institutions need to:


  • be professionally managed

  • have good financial results on a sustainable basis

  • serve their clients according to the principles of responsible finance and

  • show a strong interest in education finance as a part of their long-term strategy​


Financial institutions that participate in the program benefit from a package comprised of funds for on lending to the education finance target groups and tailor-made technical assistance (TA) for developing and implementing demand-oriented education finance services and products. The design of a financially viable program as well as the design of the products themselves should be guided by the conditions in the respective country if they are to satisfy the needs of the different target groups.


Financial institutions wishing to take advantage of being a first mover with a new set of innovative financial services in a segment with clearly growing demand can benefit from the following attractive funding conditions:


  • Long-term funding (up to 5 years, with amortizations)

  • Local currency loan option

  • Subordinated debt

  • Adaptable repayment structure, matching cash-flow pattern of education loan repayments from end-clients

  • Commercial interest rates

In order to support the partner financial institutions in designing and implementing their new education finance products, REFFA offers technical assistance (TA) support. For more information please refer to the Technical Assistance Facility.


The selection process entails discussions between the Fund Manager – BlueOrchard Finance- and the institution’s management followed by an on-site due diligence. If the due diligence yields favorable results and both sides are convinced that there is common ground to build on, a memorandum of understanding will be signed which outlines the framework for future collaboration (namely debt funding for education finance and accompanying TA).



Financial services designed to promote the quality of education and to increase access to education should ideally aim to cover the needs of various target groups:​

Target group


Private education providers

Private education is playing an increasingly important role in the education sector in Africa. Education providers need funding in order to strengthen their market position by improving their teaching quality and enhancing their capacities.

Their financing needs typically range from investments in infrastructure (school expansion and modernization of school building facilities and premises), teaching equipment, school transport means (school buses), and marketing activities. At the same time, they would greatly benefit from financial services that help them to better manage certain aspects of their business, such as collecting tuition fees, along with many other products typically used by SMEs.

Learners and their families with MSME income

MSME owners who want to obtain a higher degree or who would like to pay for their family’s education are often burdened with having to simultaneously invest in their current business on a regular basis. This makes it difficult for them to save up the required amount for tuition fees before the due date.

What they require is a loan or a savings facility that allows them to distribute the burden of education costs over a certain time period in a way that will not affect the operating cycle of their businesses. Financial institutions can meet the financing needs of this target group by offering products such as short and medium-term loans, or term deposits and savings accounts that offer access to a loan once a savings target has been reached

Learners and their families with salary income

Salary recipients often make great sacrifices to invest in education – either their own or that of family members.

In order to help learners and their families distribute those expenses over the year and even save up for education in the long run, financial institutions can offer them tailored short- and long-term loans or savings facilities.

Learners without income

Learners, such as young high school graduates often face severe obstacles in pursuing their chosen educational path.

The financial sector has traditionally been unable to finance learners without income as a potential target group because their needs are for long-term financing with extensive grace periods and limited or no collateral. However, the credit risks associated with this group of borrowers can be mitigated by aligning the interests of private and public stakeholders (e.g. guaranteeing part of the student loans) via different forms of public-private partnerships.


Co-operation with REFFA offers new business opportunities for financial institutions, as it enables them to add a range of innovative products to their product list. By enlarging their product range, financial institutions will be able to serve existing clients better and to reach out to new clients, who in turn may then be encouraged to use the institution’s other products and services.


On top of this, offering education finance products allows financial institutions to attract additional client groups, which form part of the value chain of the education sector, such as suppliers and service providers whose customers include education providers.


Below is an overview of some of the products and services that financial institutions can offer in the framework of education finance. These should always be adapted and fine-tuned according to the local market environment and the individual strategies and objectives of each financial institution.



Education loans


Financial resources mobilized from private households can help the education sector – public or private – expand its capacities and better adapt its offer to the demand of learners and the labor market. Education loans can support both the demand and the supply side of education markets: learners and their families can spread educational expenses over a longer period of time whereas education providers are thereby able to enlarge and improve their offer of education through targeted investments. Such loans offer several advantages:


  • Education provider loan – supply: this loan product is aimed at private education providers for the purpose of investment in their educational institutions. An important characteristic of this loan is the customizable repayment scheme. Since education providers typically receive cash inflows only in the months of school fee payments, loan products with monthly repayment schedules are very inconvenient for them.


  • Education loan for students and their families – demand: tuition fees typically have to be paid at the beginning of a term and many students and their families face challenges in saving up enough money to make the lump-sum payment. The education loan addresses this problem by supporting MSME owners and salary receivers in financing their own or their family members’ tuition fees. This product can be designed as a short/medium-term loan for paying tuition fees for the upcoming school year or term, or as a long-term loan for financing a complete education cycle of two or three years.



Education savings products


In combining financial sector development with education sector development, it is important for REFFA to promote not only loan products but also savings, as education expenditures are largely predictable in amount and time. Offering formal savings products for learners and their families can be another option for promoting better education by partly or fully financing education in a demand-oriented way. For some financial institutions, deposits (especially term deposits) may represent an important source of loanable funds.


  • Cumulative deposit for education: this product is a term deposit account with a maturity of up to 12 months that allows the holder to add to the balance at any time. It enables students and their families to save for educational purposes such as tuition fees for the upcoming year or term. A predefined savings target and a “no-withdrawals” rule ensure that the amount needed will be available when the maturity is reached.


  • Savings plan for education: The purpose of this type of account is to save for future education costs by depositing fixed amounts on a monthly basis over a period of one to three years. A limited number of withdrawals are allowed before maturity.


  • Savings account for education: This savings account is designed for those (future) students and their families who want to save for their education but do not want to or cannot afford to stick to a predefined savings plan.



Our investees and their clients

REFFA aims at improving access and quality to affordable education in Africa by channelling funds via financial institutions (investees) to education providers, students and their families (end-clients).


    REFFA’s portfolio as of the latest reporting date can be found here.











The following client stories portray the impact REFFA has on the end-users in reality.

Client stories

Loan client: Augustin Kalonji

Type of education offered: Secondary vocational, secondary general, primary and kindergarten

Loan purpose: Purchase of furniture and equipment, especially for the vocational secondary level; painting and decorating work

Financial institution: ProCredit Bank Congo

Location: Kinshasa, Democratic Republic of Congo

Loan client: Maman Nsongo

Type of education offered: Secondary vocational, secondary general, primary and kindergarten

Loan purpose: Purchase of technical equipment and construction material; classroom construction

Location: Kinshasa, Democratic Republic of Congo

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