SC Ventures by Standard Chartered, which builds and invests in innovative ventures in and beyond banking, is stepping up efforts in addressing the $70 billion education funding gap in Africa by partnering with banks and mobile wallet providers to create financing solutions for parents and schools.
The organisation is leveraging data from mobile wallets and will collaborate with financial institutions to underwrite loans for educational purposes. The loans will be paid directly to the schools, thereby reducing the risk of capital diversion.
In a recent interview with ITWeb Africa, Dan Karuga, Africa Lead at SC Ventures, discussed how education remains a highly coveted yet elusive necessity across the continent, and for over 100 million children, it remains out of reach.
Karuga emphasised the importance of education as a foundation for societal progress and outlined SC Ventures' strategy to bridge the $70 billion funding gap in Africa.
To this end, the company is backing start-up, Furaha, a purpose-driven financing platform bringing accessible financing to sub-Saharan Africa, starting with education.
In Swahili, Furaha means joy. The start-up is backed by SC Ventures by Standard Chartered and Yabx.
Furaha will leverage artificial intelligence-powered credit scoring to make school fee financing accessible and inclusive.
So far, Furaha is targeting in-scope markets beginning with Uganda and other markets across Africa such as Tanzania, Kenya, Zambia, Nigeria, Ghana, and Côte d’Ivoire.
The initiative, according to Karuga, aims to ensure that funds are used specifically for educational purposes, mitigating risks associated with capital diversion.
Since January 2025, Furaha has disbursed over 1 billion Ugandan shillings, supporting more than 2,000 learners in just five months, he said.
Karuga went on to say now the goal is to empower over 10 million children across Sub-Saharan Africa in the next five years.
Education is paramount
Explaining the rationale for supporting Furaha, he said: “It's one of our portfolio companies that came out of a need for purpose-driven financing, beginning with education loans to qualifying parents/guardians. And you may wonder why education?
“It is the foundation of any progressive and sustainable society. Yet, just like the SMEs that we just spoke about, the exclusion continues to grow. I think if you look at some of the statistics, they're quite, you know, mind-boggling.”
“20% of kids between 6 and 11, they're out of school. It even gets worse as kids continue to progress. Between the ages of 12 and 14 years, a third of those kids are out of school. So, if you look at the number of the funding gap in terms of education in Africa, it's approximately $70 billion.”
Karuga continued: “So, what does that mean? It means there's a lot of work that needs to be done, not just by the government, which primarily takes lead in terms of creating policies, creating infrastructure for schools, but private capital like ourselves to try and remediate that gap so that we can build a society, we can give the society the wings that they need to be prosperous in whatever areas that they need to, they choose in life. So, that's the sort of thesis upon which Furaha is built on.”
Channel to access funding
According to Karuga, Furaha started in Uganda, and it's a partnership-led model where the company is working with a consortium of players within an ecosystem.
He explained: “So, we started with telco MTN. If you look at the mobile wallets between those two, it's about 25 million wallets. So, what does this allow us to do?”
“It allows us to leverage transaction data to underwrite the parents who are in need of financing. If you look at the other partners that we work with, we call the school aggregators.”
“So, these would be platforms that can bring together all private schools. I think on our platform right now we have about 14,000. Again, what it means is that we can be able to distribute this access to finance through a single channel.”
The funding model
On the funding side, Karuga said: “We are working with a couple of banks, again, and this is the power of the partnership. Traditionally, these banks would not be able to do these things, obviously, because of limitations in terms of legacy and IT issues. So, we're working with Opportunity Bank of Uganda and Diamond Trust, to try and fill this gap.
“And the gap in Uganda alone is in the north of $300 million. About 6 million kids can benefit from these loans.”
“The difference between this and other consumer products is that this is a purpose-led product. Risk of capital diversion is one of the biggest challenges that faces African consumer lending, where people get money that was intended for one purpose, and then it ends up going in a different direction.”
“To avoid that, we make sure that the funding goes to the schools where the kids attend, so that risk is mitigated.”
Small businesses are the future
Additionally, the interview centred on SC Ventures' investment strategy, which aims to build, test, and commercialise innovative ideas while investing in fintechs that enhance their portfolio, particularly in the SME sector that is critical for Africa's economic growth.
Karuga explained that the organisation has a global portfolio of around 30 ventures and is increasingly focusing on digital banking, reflecting the digitalisation of financial services.
He said a key initiative in the Africa region, by SC Ventures is SOLV, a platform designed to address the $330 billion funding gap for SMEs by connecting them with credit based on their trading cycles.
“This initiative, initially launched in Kenya and expanding to Ghana and other markets, aims to provide targeted working capital solutions to empower small businesses,” he said.
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