Girls First Finance

Africa’s youth population is expected to keep growing through 2050. With proper social support and opportunities, young African women contribute significantly to long-term GDP growth. Yet, currently, 80 million girls live in poverty, which increases the risks of facing further adversities such as sexual exploitation and school dropouts, destroying many of their chances to become productive citizens.  

Adolescent girls and young women desperately want to learn to improve their economic independence. They recognize the high return on investment for tertiary education degrees (World Bank: 17% ROI). But many cannot cover the education fees and do not have access to affordable loans. The market failure is that the private sector has not stepped in to fill the funding deficiencies of governments, and donors cannot meet the demand for tertiary education and training.

In Kenya, only 20% of young women attending vocational training colleges (TVETs) receive government funding, and then only for 30% of their costs. This leaves over 500k young women a year without funding. Conventional banks regard young women as “risky,” and governments often cap interest rates on student loans below market rates, further reducing banks' appetites to lend. NGOs are funded philanthropically and can’t scale, while predatory lenders demand interest rates of 180% annually.

Consequently, young women are pressured into sexual exploitation by so-called “sugar daddies” or forced to abandon their education, denying them income and economic empowerment for life. Lacking alternatives, as many as 50% of girls are then forced into sexual exploitation or abuse to meet their education funding needs, which leads to permanent mental health traumas. This creates a ripple effect from a developmental context leading to the unequal economic empowerment of women. (31% gender gap in SS Africa: WEF).

Based on a recent global survey GFF launched with over 1,000 respondents to date, more than 80% of respondents have been pressured into sexual acts in their lives, and more than 60% have avoided an academic or career opportunity out of fear of being sexually exploited in that specific context. Most alarming, 45% of respondents confirmed starting an intimate relationship to cover school fees, while over 42% indicated the main reason for being exploited was a need for money or income. Combined with the other responses indicating one-off sexual exploitation, the early data already suggests a profound level of sexual exploitation for education worldwide. Equally, the opportunity for a financier is a market of millions of potential female borrowers taking extreme measures to obtain education funding seeking better options. 

GFF addresses the challenges these young women face holistically in four ways: 1) affordable loan financing and budgeting tools, 2) protection against sexual exploitation and abuse, 3) access to mentors and employment opportunities, and 4) access to a safe social network. Its digital support ecosystem swaps financial collateral for social collateral. To secure a loan, borrowers must secure a mentor, counselor, and committed “crew” of three supporters. But, also, GFF uses behavioral underwriting algorithms that reward the unique traits vulnerable girls offer financiers. Borrowers prove their “grit” and conscientiousness through behavioral questionnaires and consistent engagement on the app. The most competitive candidates regularly engage with the app’s educational empowerment content, respond to periodic user surveys (measured from the app's backend), and apply for “side hustles” and employment via the app’s “Gig Gladiator.” These actions provide an excellent proxy for creditworthiness superior to traditional measures, parental income, which excludes dedicated but under-resourced candidates.

Metadata gathered from GFF app users will transform how the financial services sector views young women, shifting them from high-risk borrowers to compelling future customers. GFF’s super app can be combined with any other fintech or conventional bank’s lending platform to enhance portfolio performance, providing immediate scale and enormous geographic reach beyond markets where GFF is regulated as a lender.

How GFF Assesses and Builds Creditworthiness

GFF’s super app provides the means to evaluate those user attributes directly correlated with creditworthiness. Some are probed directly by questionnaires and forms, while others are inferred by APIs usage:

1.     Grit is assessed by a prerequisite in a questionnaire for the Loan Ledger GFF feature.

2.     Personality traits are measured in the Friend Finder and Mentor Matcher features through a brief big five questionnaire. Conscientiousness can be proxied by how often and consistently a user accesses and interacts with app features.

3.     Social Network is covered by: Friend Finder, Messages, Mentor Matcher, and Crew Captain. The social network composition within the app is a part of the user’s social network and can be used as a proxy for its components outside the app. Furthermore, the Loan Ledger feature asks users about her family, mentor, and friends.

4.     Education: The education level of users is answered in the Loan Ledger feature.

5.     Intelligence: Although grades are usually associated with intelligence, they are not good proxies in the case of vulnerable young adults since other factors have great influence, e.g., school attendance, motivation, parental support, and teaching quality. GFF uses a questionnaire to measure the intelligence of the user directly.

6.     Financial literacy is proxied by the amount of financial literacy content accessed by users.

7.     Mental health is inferred from questions on trauma history and regularity in psychotherapy sessions booked in the feature Wellness Warrior. This proxy is possible since most of our user base at the moment has a history of trauma, and counseling is an important element in overcoming their trauma injuries. Other features to improve mental health are Daily Dose and You Should Know.

Girls First Finance Demo Video: https://vimeo.com/824947140?share=copy

In Kenya, more than three million girls between the ages of 18 and 25 strive to obtain even modest higher education certificates or degrees. This credential is the crucial “gating” factor for these girls to obtain financial sovereignty. But enrolling in these educational institutions requires them to overcome the hurdle of financing their education expenses. Without accessible conventional loans, the “sponsor” culture then proliferates. While this crisis is rampant across universities, the circumstances are most desperate among students in Technical and Vocational Education Training institutions (TVETs). Without the support of these financial sponsors covering tuition expenses on behalf of their “sugar babies”, many of these institutions would financially collapse. But the cost to the girls is profound. Among the TVETs with whom GFF partners, 20% of girls are young mothers having fallen pregnant from the abuse and exploitation they experience.

Moreover, recent surveys of GFF borrowers indicated that 76% of those girls surveyed felt unsafe in their relationships at least once over the last year. Even direr, 100% of borrowers surveyed felt depressed daily to the point of suicidal ideation. The cause of their stress: money. But because they are deemed uncreditworthy by conventional private banks, they are faced with two untenable choices:  sacrifice their dignity to be exploited by male sponsors embracing sexual and physical abuse, pregnancy, and often HIV, or take a mobile loan with interest rates of 180% a year and 30-day repayment periods. The prospects of success under such pressure are dim for these girls living on a dollar a day without savings. Yet they crave digital connectivity—most girls surveyed by GFF sacrifice two meals daily to pay for data bundles.

GFF has launched its pilot in Kenya because of the team leader’s 15-year track record investing in Kenya’s higher education infrastructure sector as one of the continent’s leading investors in university public-private partnerships. The founder developed the GFF solution upon discovering the exploitation of girls at public universities where she had invested (amounting to more than $35mm to date), including at Kenyatta University, where the founder has a contract to build 10,000 dormitory beds and the University of Ghana, where she led an investment of $64mm to nearly double the university’s main education infrastructure.

The team leader then conducted a series of focus groups and surveys with young women across Africa where they had projects, and the feedback was resoundingly clear that, without student loans made available to unbanked girls, they would have no choice but to continue to trade sex for education support. And they also needed access to work, a safe social network, and safeguarding and protection from exploitation because so many girls were equally exploited by the adults around them, including their own professors. So, she decided a super-app with a suite of various features centered around those four pillars was the only digitally and commercially scalable solution to offer them.

The final seed of Girls First Finance came out of the team leader’s own journey as a survivor of sexual assault and abuse herself. GFF began after she commenced intense trauma therapy to treat complex PTSD. Having reached a transformative level of healing, she wanted to make the same therapeutic protocols, which were neither expensive nor high-tech, accessible to young women everywhere regardless of their economic means. Since then, GFF has built a local team that engages with its stakeholders directly and through its partners (including the YMCA, Safaricom, and the Kenyan Association of Professional Counselors) with focus groups and surveys to see where the app needs further iterations to meet their needs better.

But scaling the app and loans platform is an essential ingredient for delivering a truly impactful solution to those who need it. Given the team leader’s extensive African network and track record of investments in other university projects, GFF can expand to the 25 million potential female borrowers in Nigeria, Ghana, Cote D’Ivoire, Tanzania, Uganda, and South Africa post-2023. 

Finally, on a technical level, the team's CTO specializes in building fintech apps and has recruited a team of developers with similar sector exposure. GFF is also uniquely global, with team members hailing from five continents. The team's experience covers the necessary sectors required for this venture, including education reform (US), holistic human development (UK, US, and Kenya), social media management and youth engagement (Kenya), innovative finance (US and Europe), credit underwriting (Kenya), digital lending (Europe and India), and software development (Europe, India, and Kenya). Together, the team brings its different cultural perspectives to ensure the UI/UX experience is embraced by young people worldwide. 

GFF is approaching 1,000 app users, 40,000 followers across all social platforms, over 1,000 global user requests, of which the majority will continue to keep downloading the app, and over 2,000 additional Kenyan users who are currently onboarding out of 7,000 available pre-paid subscriptions donors have purchased to date to be distributed by year-end.  

Girls First Finance will thrive best with partners like MIT Solve that bring networks of aligned, mission-oriented collaborators. GFF is specifically seeking support for the following:

Financial: GFF seeks credible partners to validate its impact solution to support its fundraising efforts. GFF particularly needs funding to increase marketing efforts to recruit more mentors and general users. GFF also needs to identify additional accounting professionals to support its growth. 

Technical: GFF seeks to find a new female product owner and project manager as well as more female developers who can help it refine its requirements and UI/UX to continue iterating better solutions for its target market. GFF also seeks to build a technical advisory board to support its development growth to ensure it delivers the best digital platform for its target market.

Legal: One of GFF’s most important safeguarding features in development  (Artemis) is highly vulnerable to legal challenges if not designed carefully considering multiple data protection policies globally. While GFF benefits from strong legal counsel from Paul Hastings, additional legal collaborators aligned to providing a safeguarding solution that helps survivors build credibility with their stories will help GFF release and scale Artemis faster.

Marketing: GFF will grow faster with partners that help it increase its visibility in key markets. GFF can also gain traction in new markets with strategic partners that help it secure groups of users in similar geographies so GFF can test its thesis of how it can be a digital tool to create regional ecosystems of support for young women and girls.

Cultural: GFF always accelerates local app adoption when it enters the market through a partnership with a prominent local stakeholder. MIT Solve’s international network will help GFF materially pursue additional users.

Girls First Finance is innovative in several ways:  

The first systemic attempt to address the root cause of sex-for-education “sugar daddies”– lack of student loans.

1. The first attempt to combine funding with holistic support on a digital ecosystem, ensuring the solution is scalable globally.

2. Utilizes a new underwriting methodology, using AI and relevant behavioral characteristics that provide a better assessment of creditworthiness than the traditional techniques that exclude vulnerable girls.  

Compared to the rest of the market, GFF is the only private higher education loan product built to scale globally yet affordably.  The few other private student loan providers are either subsidized and therefore limited in scope, or they have yet to provide a fully tech-enabled solution with sufficient wraparound empowerment support, which reduces their ability to scale.  Among the competitive landscape, some digital credit providers are scalable but unaffordable and often predatory.  

One Year Goals

1,000 education loans

25,000 users

10,000 counseling sessions

20,000 phones distributed with micro loans

$200,000 in emergency funding distributed across the app.

20,000 new bank accounts for first-time customers.

Increased graduation and employment rates among users.

Decreased pregnancy rates among users.

Reduced depression among users.

Increased access to nutrition among borrowers.

Five Year Goals

50,000 loans

250,000 users

500,000 counseling sessions

$2,000,000 in direct emergency funding transferred across the app.

75,000 new bank accounts for first-time customers.

Increased graduation and employment rates among users.

Decreased pregnancy rates among users.

Reduced depression among users.

Increased access to nutrition among borrowers.

GFF’s app is a data-rich ecosystem with real-time, multi-dimensional measurements to enable rapid improvements.  

Impact measurements include: 

· Female graduation rates: number of users compared to average for girls at their school or college. 

· Employment and income: Measured through TVET partner and user surveys, indicating any increase in income and number of job opportunities pursued compared to baseline statistics gathered in focus groups and surveys.  

· Safeguarding: Difference in # of users who report feeling unsafe. 19 out of 25 girls felt unsafe in latest focus group. 

· Wellness: Difference in wellness by comparing WHO self-assessment questionnaires given to users periodically. 

· Reduced depression and suicidal ideation: Difference in user self-reported depression and suicidal ideation. Latest baseline focus group of users indicated 100% of participants feel depressed and suicidal daily due to money problems. 

· Reduced hunger: Difference in access to food daily for borrowers. Based on GFF direct funding to TVETs for lunches. 

· Reduced youth pregnancy: Difference in user pregnancy compared to baseline rates collected through surveys. 

Output measurements include:  

· App users: number of active weekly and daily users. 

· Loans: Distributed to vulnerable girls as well as differences in repayment rates compared to existing lenders.  

· Mentors: Mentors actively using the app and connecting with users 

· Counselors: Counselors (Wellness Warriors) available and utilized by users and number of sessions engaged by users. 

· Crew members: Peer group “crew members” supporting users, and funds flowed from crew members to users.  

· Emergency funds: Amount distributed to users at risk, based on AI from their actively managed monthly budgets,  

· Budgeting: Users regularly and effectively using the budgeting app and reading financial literacy content.  

· Empowerment tools: Users who read and utilize GFF's daily empowerment curriculum. 

Social Change Goal:  Decrease the prominence of sexual exploitation as a means to finance education fees among vulnerable girls. Target the “sponsor” culture publicly and build tools to reduce the sexual exploitation of girls attending or aspiring to attend TVET or higher education starting in Kenya. In addition to expanding access to loan financing, improve girls’ social and emotional development, confidence and resilience through the “Wonder Woman” services the app provides to improve their self-esteem and ability to address difficult situations, strengthen their social network, and give them better access to income to build their financial sovereignty.

Outcome #1: Make the GFF app and its various features more accessible and intuitive for vulnerable girls to access, onboard, and use regularly. Iterate changes to the app to accommodate lessons learned through user engagement led by students at partner vocational schools.

Output #1: Provide premium subscriptions for additional student users and reduce barriers for vulnerable girls to access and use the app regularly. Barrier reductions include making smartphones available through loans to target users and reducing the cost of data bundles to increase their ability to deepen their engagement with the app.

 Activity #1.1: Organize marketing campaigns led by prominent Kenyan influencers.

Activity #1.2: Hire and train on-campus QA testers and GFF Ambassadors to learn how to use the app and help peer users on campus onboard the app.

 Activity #1.3: Collaborate with local telecom and other foundations to increase access to smartphones and reduce the financial burden of using data bundles for GFF’s target users.

Output #2: Improve the evidence-based data collection features on the app to capture users’ experiences and observe any increases in graduation rates, employment rates, loan repayment rates, and government examination scores.

Activity #2.1 Disseminate surveys and follow-up information on “sex for grades” across all of GFF’s platforms.

Activity #2.3 Host a “safeguarding summit” at Wilton Park with high-level stakeholders. Convene attendees to approve a Charter and an action plan that can be adopted to combat the crisis of “sex for education” globally.

Activity #2.4 Continue periodic TVET focus groups and surveys on “sex for grades” and “sponsors” to collect more robust data to current prevalence.

Output #4: Expand the pilot loan program to partner TVET learners and measure default rates among those early borrowers. Data on defaults for girl student borrowers is lacking and thus contributes to lenders not offering loan products to young women most in need. Collect rich data on default behavior to share with other lenders for the benefit of future borrowers.

Activity #4.1: Sign additional cooperation agreements with TVETs that emphasize mutual responsibilities to strengthen safeguarding and student mental health. Promote safeguarding standards in the agreements that facilitate loans for students via the mobile app.

Activity #4.2 Recruit and/or train additional Wellness Warriors to join the app. GFFF will incorporate the cost of counseling sessions into the loan amounts to make them more accessible for borrowers.

The smartphone is the most effective tool to combat the sexual exploitation of girls and young women at scale. GFF is, at its core, a fintech providing technology-enabled loans and holistic support services through Android and iOS native platforms. GFF also uses a web app and digitally administers the loans to encourage scalable access. GFF uses machine learning and AI to deliver content across multiple cultures and undertake behavioral underwriting based on algorithms built to measure user activity on the app as a proxy to gauge key character traits rather than rely upon traditional non-tech underwriting practices. GFF uses a data-first approach that recognizes the importance of contributing to enhancing the amount of disaggregated gender data from its borrowers and users. GFF also bridges digital access through SMS communication to bring others onto its platform. And finally, GFF will eventually grow to embrace blockchain and VR capacity to further serve its users by creating smoother access to cross-border transactions and access to virtual learning environments built in the metaverse that leapfrog over the limitations of its users’ existing physical learning environments. 

GFF is female-invested, female-founded, and has gender parity on its team. GFF also exists to promote the financial inclusion of young women, LGBTQ youth, and young men who become allies of the sisterhood. GFF’s technical team spans the US, Europe, India, and Africa though GFF seeks to expand its diversity to include more African-based developers. GFF has employed an equal number of female and male developers but has struggled with female developer retention, which is also a goal GFF would seek support from MIT Solve to improve. GFF does intend to introduce a QA training program for its app users to encourage entry-level positions for young women in STEM. GFF’s loan platform and innovative behavioral underwriting model can dramatically increase access to student loans and other banking services for young women who have been historically excluded.

GFF mitigates loan defaults by investing in users’ long-term personal and professional goals. GFF prioritizes income generation, emotional wellness, financial literacy, and community-building to mitigate the risk of loss due to inability or unwillingness to repay. The GFF “super app” features provide the holistic support vulnerable girls need to escape poverty. Developed based on pan-African surveys and focus groups, GFF organizes its features around four “Wonder Woman” success traits:

1.   The Provider (money): financially supports herself, her children (if any), and her family through strengthened financial literacy, collateral, and judicious use of credit.

App Features: Budget Buster (robust, customizable monthly budgeting tool with alerts for payment obligations and algorithms that calculate her ongoing cash needs), Crew Captain (group of three users recruited to monitor her budget and loan repayments, receive alerts upon material changes to her financial situation, including late payments, and provide her emotional and financial support when needed), Loan Ledger (dashboard for in-app loan application and management).

2.     The Industrialist (work): pursues her career goals, seeking mentors and job opportunities.

App Features: Mentor Matcher (connects young users with a global network of mentors trained and certified by GFF and its partners, Resume Rocker (phone-based CV builder), Gig Gladiator (database of “side hustles” and full-time jobs).

3.   The Hobnobber (safe social network): builds a network of like-minded, ambitious women to broaden her mindset with relevant issues and events.

App Features: Daily Dose (curated newsfeed of articles, music, and original “wise words” videos from GFF role models and global influencers), Friend Finder (safe social network for peers to interact), and Meetups (relevant local events with fellow GFFers).

4.   The Guardian (protection from exploitation): protects herself and others from sexual exploitation.

App Features: Wellness Warrior (90% discounted in-app counseling), Helpline (for urgent mental health support), Sticky Situation (pre-programmed tools to avoid dangerous environments), Artemis (confidential database to record or share evidence of sexual exploitation, where data is wholly owned/controlled by each user.

These four pillars (money, work, safe social network, and protection from exploitation) were the four themes constantly expressed by users that they needed to achieve financial sovereignty. To become sustainable, GFF uses a “freemium” subscription model that encourages initial use with the distribution of promo codes to a broad base of potential users and then eventually splits the services into those free for all (safeguarding) and those that require a monthly subscription fee to continue using (money, work, social network). GFF then also administers the loans via the app so that users can use loan proceeds to afford subscription fees during school. Furthermore, through partnerships with Safaricom, the use of the app is free of data bundles, offsetting the cost of the monthly subscriptions for even the poorest users who are accustomed to paying for data bundles to connect to their community and remain engaged. GFF’s loans platform sustains itself through interest income on the loans, while the tech platform gains extra revenue by administering the loans for fees paid by the loans platform. Finally, both the tech and loan platforms benefit from revenue sharing from GFF's banking partners in exchange for bringing new customers to the banks.

GFF uses a flywheel approach to reaching sustainability through four major income channels: 1) app subscription revenues both B2B (with bulk subscriptions sold to donors/NGOs) and B2C generated by Girls First Finance, LLC (the “App Co.”), 2) interest revenues and fees from loans made by Girls First Finance Loans, LLC (the “Loan Co.”), 3) revenue sharing with banks for whom GFF brings new customers either from GFF’s user base or GFF borrowers required to open accounts as a condition of a loan, and 4) fees charged from GFF, LLC to lenders (including GFF Loans, LLC) to administer the loans digitally. GFF also receives GFF Foundation support (not required for sustainability) to build new safeguarding and educational features freely available to all users. 

GFF’s two commercial platforms are designed to be sustainable by 2025 based on a ramp-up of loans disbursed, and users subscribed to the app. GFF will grow (and replicate in other geographies) at the pace that capital markets can raise loan funds for the girls who need them. GFF’s loans are made at commercially reasonable interest rates (18%) to cover currency fluctuations and operating expenses. To boost affordability, GFF offers substantially longer loan tenors (4-7 years) with estimated loan payments tested against the borrowers’ anticipated income from their intended post-graduate trades. Repayments are capped at 22% of starting salaries. GFF further de-risks its loans via agreements with each TVET to provide a 20% upfront collateral commitment for each cohort of borrowers enrolled there (reducing their current 40% bad debt allowances due to dropouts among students with insufficient funds). GFF then also lends borrowers 10% additional funding as collateral repaid over the loan term, which converts to a lump-sum savings disbursement at the end of the loan for those who repay in good standing.  

GFF’s app platform is sustained through fees from the loan company to administer the loans digitally and subscription fees through a freemium model that offers substantial benefits to users seeking holistic support regardless of borrower status. Within five years, GFF can disburse more than 50k loans and have a user base of paid subscribers that exceeds 100k.  

GFF has reached the following milestones toward financial sustainability:

· Commenced partnership negotiations with 28 Technical and Vocational Education and Training centers (TVETs) through a collaboration with Zizi Afrique (Kenyan NGO). 

· Negotiating revenue-sharing agreements with two local banks to set up GFF user accounts. 

· Cooperation agreement with the Kenya Association of Professional Counselors to provide accredited counselors to support users.

· Collaboration with Kenyan Higher Education Loans Board to promote the GFF app to potential borrowers who need secondary financing to fill their funding gaps. 

· Partnership with Safaricom / M-Pesa which will provide free data and transactions to app users and 20k smartphone devices. 

· In the process of due diligence to obtain a US Development Finance Corporation (DFC) commitment of $10MM in senior debt for the loans platform (only) to begin disbursement in 2023. 

· Exploring with a DFI exploring a $50MM guarantee facility to help GFF partner with pan-African banks to encourage their lending. 

· Discussing with MTV Shuga TV series to show young people across Africa that there are solutions to the problem of “sugar daddies”. 

· Negotiating a partnership with Give Directly – whose donors will provide emergency cash to girls in need based on GFF’s monthly budgeting tools.