Jackfruit Finance

Education is a key driver of economic mobility and a tool for breaking the cycle of poverty. While free universal primary education exists in Kenya, the public education system often struggles with overcrowding, underfunding and under performance. This inadequacy forces a significant portion of the population to turn to private institutions as a viable alternative to ensure their children receive a quality education.

Low-fee private schools make up an important share of schools in Kenya, especially for children in marginalized communities and informal settlements. In 2019, there were 18,147 private schools out of the 46,530 schools at the pre-primary level, representing 39.0% of the market share. At the primary level, 9,058 private schools out of a total of 32,344 primary schools, representing 28.0% of the market share, and at the secondary level, 1,554 private schools out of 10,487 secondary schools, representing 14.8% of the market share (UNESCO, 2020). Official statistics estimate that of the 15 million children enrolled in school in Kenya, 16.0% of primary school enrollments and 8.0% of secondary school enrollments are in the private sector, with primary level enrollments growing at a CAGR of 8.23% (Opportunity International, 2023). 

Despite the critical role that private education plays in serving the needs of the Kenyan population, the sector faces enormous financial exclusion. Factors contributing to this problem include limited access to traditional banking services due to perceptions high risk, high interest rates from local lenders and a lack of tailored financial products that take into account the unique revenue cycles of private education institutions. Consequently, there is a $436M USD gap in affordable debt for low-cost private schools in Kenya (Opportunity International, 2023). 

A lack of definitive investment in private education contributes to underdeveloped school infrastructure, staff shortages and inadequate educational tools, negatively impacting learning outcomes. When schools lack the resources they require to offer quality education, it perpetuates a system where children from low-income families are unable to access the opportunities necessary for improving their lives and escaping poverty. The problem also exacerbates gender disparities, as girls are disproportionately affected by the lack of educational opportunities, often leading to early dropouts and limiting their future prospects.

There is a strong demand for sustainable financing options and innovative solutions to support the private education sector, especially considering that despite the existence of free public primary education, a significant number of parents in Kenya opt for low-fee private schools, which are perceived to offer better quality education (Zuilkowski et al., 2018). This is supported by the superior academic performance of private schools on national exams like the Kenya Certificate of Primary Examination (Bold et al., 2013; Catherine 2015). Additionally, research comparing learning gains in low-fee private schools against those in public schools, using a longitudinal sample of students that benefitted from an instructional improvement intervention, showed increased performance in English, Kiswahili and mathematics (Zuilkowski et al., 2020). These findings indicate that, with the right support, low-fee private schools have the potential to offer superior learning outcomes.

Jackfruit Finance is empowering low-fee private schools to create a conducive learning and development environment for children in underserved communities. Our solution takes a holistic approach, providing low-resource schools with financial support to deliver quality education, and leveraging strategic partnerships in healthcare, WASH, nutrition, artistic and creative domains to ensure that children from low-income families receive comprehensive interventions to nurture their learning and development. 

Harnessing our digitally enabled financial tools, we provide accessible and affordable financing that specifically caters to the unique needs of low-fee private schools in underserved communities.

Our core products include:

• Fully Secured Project and Asset Loans to support the development of school infrastructure and procurement of learning materials, school buses/vans and other essential assets.
• Unsecured Working Capital Loans to support day-to-day operational expenses and address immediate financial needs. 
• Flexi Loans for unique situations and borrowers with limited collateral options to cover the loan amount, but needs exceeding our Working Capital limit. 

• Impact-Linked Loans that reward  schools for improved literacy and numeracy rates. These learning outcome assessments are conducted by a third party.

A portion of our profits is reinvested in delivering complementary services, including clean water, nutritious meals, textbooks, after-school programs, professional development for teachers and fuel vouchers. To date, we have reached over 74,359 children across 191 schools in Kenya, including one school for children with disabilities.

Our competitive landscape shows that financial services for schools are scarce and often misaligned with their needs. The JF model provides a more feasible and effective solution for several reasons:

• Customization: Breaking with the traditional lending approach, our processes are more inclusive, taking into account seasonal cash flows and the culture of informal financial records among low-fee private schools.
• Efficiency and Accessibility: By leveraging our digital platforms for loan application and disbursement, we significantly reduce the time and complexity involved in accessing funds. 
• Capacity Building Incentives: To encourage responsible financial behavior, our holistic model offers additional support to schools with timely loan repayments. This includes access to services such as teacher upskilling programs, school management software, discounted educational materials, safe drinking water and after-school activities for students.
• Scalability: The digital nature of our solution allows for rapid scaling across regions and countries with minimal additional operational costs.

Theory of Change

By providing low-fee private schools with access to tailored financial solutions and capacity-building programs, we enable them to improve and expand their infrastructure, hire and train qualified staff, and procure essential learning materials and other assets like school vans and buses. This, in turn, enhances access to and quality of education offered to children from low-income families, leading to increased enrolment and retention rates, especially among girls, better educational outcomes. Over time, these changes contribute to breaking the cycle of poverty in these communities, as educated individuals are better equipped to secure employment, start their own businesses and participate fully in the economic development of their societies.

Learn more about Jackfruit Finance’s work below:
www.youtube.com/watch?v=I0iGNU...

The primary beneficiaries of our innovation are children attending low-fee private schools in East Africa. Ultimately, these children along with their families and broader communities will experience significant gains, as improved educational opportunities can significantly alter life trajectories, promote gender equality and stimulate economic development. Presently, our schools are spread across 10 counties, including rural, peri-urban and informal urban settlements, representing diverse communities with severely underdeveloped educational infrastructure.

Most of our schools cater to children aged 4-12 years, with a smaller percentage serving the early childhood stage (<4 years old) and secondary school pupils (13-17 years old), all hailing from low socioeconomic status households. Additionally, our diverse portfolio currently includes one school for children with disabilities, a population that we aim to invest more in over the next 2 years. Teaching and non-teaching staff employed by the schools we serve are also an important group of beneficiaries of our solution, as they too are impacted by the infrastructural challenges and operational health of these institutions.

Jackfruit Finance is dedicated to creating significant positive impact and benefits for low-fee private schools and the communities they serve. Our growing contributions include:

• Enhanced School Infrastructure: We have played a pivotal role in transforming school infrastructure, impacting over 74,359 students and 3,692 teaching and non-teaching staff to date. With over $2.4M USD in project and asset loans disbursed, our financial support has empowered schools to enhance their facilities, facilitating the construction and renovation of multiple classrooms, including the establishment of an entirely new school, and the purchase of numerous vehicles.
• Operational Stability: Our working capital loans ensure that schools can meet their day-to-day operational expenses. School revenues tend to be highly variable, with school fees paid at the start of each school term, while expenses such as rent or payroll are constant over time, creating significant issues with schools’ cash flows. Working capital to smooth cash flow has been crucial for maintaining the quality of education, covering expenses like teacher salaries, learning materials and other operational costs.
• Financial Prudence: Our incentive programs and partner rewards cultivate a culture of fiscal responsibility within schools, encouraging punctual loan repayments to ensure that they obtain additional support.  The results of this approach are reflected in our impressive track record which shows a 0% default rate, a net promoter score of 74 and a notable 18% returning borrower rate.
• Gender Equality and Empowerment: Notably, 73% of our school directors are female and 51% of our student beneficiaries are girls.
• Empowering Low-Income Communities: Many of the schools we serve are located in marginalized communities and informal settlements. Improved access to high quality education contributes to the overall development of these communities. 
• Job Creation: Through our working capital loans, Jackfruit has directly contributed to creating and maintaining 4,271+ jobs for teachers and other school support staff.
• Clean Drinking Water: To date, we have provided access to clean drinking water to 19,255 children.
• African-Themed After-School Activities: 825 children enrolled in extracurricular activities featuring song, percussion, dance and storytelling.

The Jackfruit Finance team is deeply reflective of the community it serves. Comprising 86% (19 out of 22) East African team members, our team embodies the diversity and nuances of the regions we operate in. We have seasoned professionals with expertise in finance, startup growth, education, and social impact, bringing a wealth of experience crucial for the successful execution of our mission. This diverse skill set positions us uniquely to navigate the complexities of school lending by ensuring sustainable operations, regulatory compliance, and impactful growth.

Co-founders, Rob Alhadeff and Max Weiner, have a personal connection to Jackfruit's mission, having spent a combined 11 years in Uganda and Kenya, witnessing the critical role played by low-fee private schools.

Rob, our CEO, has a background in credit management and has spent considerable time immersed in the educational landscape of East Africa. His experience includes restructuring an educational NGO in rural Uganda, giving him firsthand insights into the challenges faced by low-fee private schools.

Our Head of Operations, Benson Gathatwa, has 23 years of microfinance experience, having started as a Loan Officer and progressed up to Managing Director of a 3,000 employee microfinance institution. 

Approximately 50% of the Jackfruit team are female, with key positions held by women, including the Financial Manager, Head of Legal, Credit Analyst and Head of Impact. This gender diversity is not only evident within our organization but also extends to our impact on the broader community. By empowering women through our initiatives, such as supporting women-led schools and contributing to job creation for women in the education sector, we actively foster gender inclusivity.

Our solution's design and implementation are directly informed by the communities we serve. We maintain a continuous feedback loop with schools, conducting regular surveys and community forums to gather insights into their specific needs and challenges. This feedback is integral to our operational strategy and helps us iterate our financial products and services to better meet the needs of these institutions. For instance, after learning from school administrators about the seasonal cash flow challenges they face, we tailored our loan repayment structures to align with the academic calendar, thus easing their financial burden during off-peak months.

Additionally, our approach to social impact leverages many local partnerships, ensuring that we collaborate with teams already immersed in the communities we aim to serve. For instance, we have worked with local organizations like East African Book Publishers to deliver affordable textbooks to schools, Domysuma Architects to optimize classroom designs, and Cheza Cheza to offer African-themed extra curricular activities.

In summary, the Jackfruit team is well-equipped to achieve its ambitious goals, which include:

• Geographical Expansion: Expand our services to new regions within and beyond Kenya.
• Portfolio Growth: Increase our loan portfolio to over $25M, leveraging a blended capital structure to reach 10,000+ schools and 10M+ students.
• Financial Inclusion: Refine our digital infrastructure and lending strategies to enhance accessibility and affordability for low-income schools.
• Monitoring and Evaluation: Implement robust impact frameworks to measure and assess the effectiveness of our programs.

The "Growth" stage definition most accurately represents our current status for the following reasons:

• Established Solution: Jackfruit Finance is fully operational and serving low-fee private schools in 10 counties across Kenya. We have functioning model that is successfully being executed.
• Consistent Design and Approach: Our financial products and educational support services have been consistently provided to schools, with organized processes and strategies in place reflecting our stable post-pilot design.
• Readiness for Further Growth: With plans to expand to all 47 counties in Kenya and eventually to other countries in East Africa, Jackfruit Finance is positioned for significant growth. This readiness, coupled with an existing operational base, aligns well with the "Growth" stage definition.
• Sizeable Formal Investment: Jackfruit Finance has attracted considerable funding from a blend of commercial and philanthropic sources. Securing this support has demanded extensive due diligence from external parties, the successful navigation of which demonstrates that our organizational maturity is past the early stage phase.

The MIT Solve Global Learning Challenge represents a strategic opportunity for Jackfruit Finance to bridge critical gaps and leverage resources to amplify our impact. Specifically, MIT Solve's ecosystem of partners, mentors and resources aligns perfectly with our needs across several dimensions:

Digital Infrastructure:
Jackfruit’s digital platform, central to our operational efficiency and scalability, requires continuous improvement to handle our expanding scope. MIT Solve’s technological support, through partnerships with tech companies and access to cutting-edge innovations, could significantly enhance our platform's capabilities. This could improve loan processing times, enable more sophisticated credit assessments, and offer better service to the schools relying on our financial products.

Credit Scoring Innovation:
As we expand our reach, managing financial risk while maintaining our commitment to inclusivity presents a complex challenge. We have developed a robust database of risk indicators and repayment history during our years in operation, and aim to refine and improve our credit scoring model utilizing this data, making it more robust against default risks without excluding schools that could benefit from our services. The MIT Solve network could connect us with technological innovators and financial experts who have experience leveraging AI and machine learning for financial services, with the $10,000 award helping to defray the costs of hiring these experts. The insights we could access from experts using Solve funding will guide us in integrating more nuanced predictors of creditworthiness that consider the unique contexts of low-fee private schools. 

Monitoring, Evaluation, and Learning (MEL):
Effectively measuring and communicating the impact of Jackfruit’s interventions can be challenging. MIT Solve’s ecosystem offers access to leading experts in impact measurement and evaluation, which will greatly enhance our capacity to implement robust MEL frameworks for tracking the progress of our initiatives, assessing educational quality and learning outcomes, and informing our long-term strategy. Additionally, the opportunity to collaborate with academic institutions and research partners through MIT Solve could help us conduct rigorous impact studies to ensure that our interventions are evidence-based and data-driven.

Financial Barriers:
Jackfruit consistently strives to diversify funding sources to strengthen our blended capital structure and scale our model across East Africa. MIT Solve's network of impact investors and philanthropic organizations could provide the capital injection necessary to expand our loan portfolio, enabling us to reach more underserved schools and children. Furthermore, MIT Solve’s grant opportunities and potential connections to additional funding sources would directly support our goal to disburse more loans and enhance educational outcomes for hundreds of thousands of students.

Cultural and Market Insights:
Through MIT Solve, we anticipate gaining insights from local experts and organizations to deepen our understanding of the communities we serve.

Scaling and Sustainability:
As we look to scale our impact, balancing growth with sustainability poses a significant challenge. MIT Solve’s mentorship and strategic planning resources could help us refine our model for scalability while maintaining financial sustainability. Additionally, connections to potential partners and collaborators within MIT Solve’s network would enable us to explore innovative solutions and collaborative projects that could extend our reach and deepen our impact.

Jackfruit Finance's solution is innovative in its comprehensive and nuanced approach to addressing the financing needs of low-fee private schools in underserved communities. Our model is designed to be a catalyst for change, influencing both market practices and long-term educational outcomes.

Tailored Financial Products: 
Unlike traditional financial services that offer generic loan products with rigid terms, Jackfruit Finance designs financial products specifically for the educational sector. These products consider the unique cash flow patterns of schools, such as term-based revenue cycles, which allows for repayment schedules that align with schools' income streams. This reduces the financial burden on schools during low-revenue periods.

Impact-Linked Loans: 
Jackfruit Finance has pioneered the concept of Impact-Linked Loans in the education sector in Kenya. These loans offer better terms or rewards based on specific educational outcomes, such as improved literacy or numeracy performance. This not only provides an incentive for schools to focus on quality but also ensures that funding is directly contributing to educational enhancements.

Digital Integration: 
Leveraging technology, our digital platform facilitates seamless loan applications, quick processing, and efficient management of loans. This increases accessibility for school administrators and reduces the operational overhead involved in handling loans, making financial services more accessible and scalable across regions.

Empowering Educational Institutions: 
By providing schools with the resources they need to improve infrastructure and hire qualified staff, our solution helps elevate the overall quality of education. This not only benefits the schools and their students but also sets a benchmark for educational standards in low-fee private schooling.

Encouraging Financial Inclusion: 
Our success in offering tailored, risk-adjusted financial products can encourage more financial institutions to consider underserved markets like low-fee private schools as viable clients. This can lead to increased financial inclusion and more innovative financial products in the market.

Changing the Market/Landscape:
As Jackfruit Finance proves the viability of investing in educational outcomes through tailored financial products, it can shift the market landscape by attracting more capital to education sectors in emerging markets. This expansion isn't limited to private investors; it can also draw attention from public funding bodies and international development organizations.

Setting Industry Standards: 
By successfully implementing a model that integrates financial health with educational outcomes, Jackfruit Finance aims to set a new standard in the education finance industry. Our model could encourage other financial institutions to consider how financial products can be designed not just for profit but also for social impact. This could lead to a significant transformation in how financial services operate, particularly in sectors that directly affect human development, such as education and healthcare.

Societal Shifts: 
By improving education quality in underserved areas, Jackfruit Finance contributes to broader societal changes, including enhanced economic opportunities, reduced gender disparities, and stronger community development. These changes can have lasting impacts on societal structures and economic policies.

Jackfruit Finance's theory of change is grounded in both empirical evidence and practical observations from our operations. By aligning our activities and inputs with clear, measurable outputs and outcomes, we ensure that our approach is not only strategically sound but also capable of making a significant and lasting impact on the communities we serve.

Key Inputs and Activities:

• Providing Tailored Financial Products: Offering affordable loans and impact-linked loans designed to meet the specific needs of low-fee private schools in underserved communities.
• Capacity Building Programs: Delivering training and resources for teachers and school management staff, aimed at improving educational delivery and school operations.

• Partnerships with Educational, Creative Arts and Health Organizations: Collaborating with local organizations to provide additional services such as clean water, nutrition, after-school programs and educational materials.

Immediate Outputs:

• Improved School Infrastructure: Enhanced physical learning environments due to financial investments in school facilities.
• Enhanced School Management and Staff Skills: School staff receive training and development, leading to improved teaching quality and school management.

• Increased Access to Complementary Services: Schools gain access to safe drinking water, nutrition programs and extra-curricular programs that support students’ overall well-being and learning.

Short-term Outcomes:

• Increased Enrollment and Retention Rates: As school conditions improve and schools offer better education, more students enroll and stay in school.
• Improved Student Learning Outcomes: Students benefit from better teaching and improved school environments, leading to higher academic performance.

• Enhanced Community Engagement: Through our integral collaborations with community-based partners, there is greater community involvement in educational initiatives to provide additional support to schools.

Long-term Outcomes:

• Economic Mobility: Improved education quality leads to better job prospects for students, contributing to economic mobility and poverty reduction.
• Reduced Gender Disparities: Enhanced educational opportunities for girls lead to greater gender equality in educational and economic outcomes.
• Strengthened Local Economies: Educated individuals contribute to local economies, fostering overall economic growth and stability.

Evidence Supporting Links:
Financial Solutions for School Improvement:
A study in Pakistan, involving 306 low-fee private schools, demonstrated that access to financial resources (in the form of cash grants) resulted in significant improvements in school infrastructure, including the construction of new classrooms and procurement of learning materials. This directly correlated with increased student enrollment, accompanied by higher revenues and test scores (Andrabi et al., 2020). 

Impact-Linked Loans
The Michael & Susan Dell Foundation initiated a novel approach in India, targeting the improvement of educational outcomes through impact-linked loans (ILLs). This pilot program involved 96 schools and partnered with two leading school finance companies, offering variable interest loans structured with financial incentives. These incentives were designed to motivate school leaders to enhance student learning, tying the rate of return on the loans to measurable improvements (5-15%) in student learning outcomes (Rangwal, 2018). To establish the efficacy of ILLs in an African context, Jackfruit is currently running a similar incentive structure involving 40 schools that have taken loans in 2024, with a pre- and post-assessment of student literacy rates at baseline (0 months) and endline (12 months).

Jackfruit Finance's impact goals are strategically aligned with transforming the educational landscape for underserved communities by providing sustainable financial solutions and comprehensive support services. Specifically, we aim to:

• Improve Educational Outcomes: Enhance the quality of education and academic performance in low-fee private schools in underserved communities.
• Increase School Sustainability: Empower schools to achieve financial stability and operational independence.
• Promote Gender Equality in Education: Increase access to quality education for girls and support women-led educational institutions.

• Enhance Community Development: Foster broader economic and social benefits through improved educational services.

Measurement of Progress

Our progress towards accomplishing these goals will be measured as follows:

1. Educational Outcomes

Indicators:

• Increase in student enrollment and retention rates.
• Improvement in foundational numeracy and literacy skills.

• Improvement in student performance on national examinations.

Measurement Tools: 

• Surveys and academic reports from partner schools

• Comparison of baseline and follow-up academic performance data using national exam scores and other validated tools like the EGRA, EGMA, FLN.
  

2. School Sustainability

Indicators:

• Comparison of school infrastructure at baseline and follow-up.
• Comparison of school enrollment numbers at baseline and follow-up.
• Comparison of textbook-to-student and teacher-to-student ratios at baseline and follow-up.
• Comparison of revenue at baseline and follow-up.
• Number of schools maintaining positive cash flow year-over-year.

• Percentage of schools that renew or expand their financial engagements with Jackfruit Finance.

Measurement Tools: 

• School surveys
• Financial assessments

• Loan repayment rates 
  

3. Gender Empowerment and Equality

Indicators:

• Proportion of female students to male students in the supported schools.

• Number of women-led schools receiving financial support.

Measurement Tools: 

• Enrollment data disaggregated by gender

• Surveys focusing on school leadership and management structures.

4. Community Development

Indicators:

• Job creation within the educational sector, particularly in supported schools.

• Community participation in educational services and activities e.g., WASH programs, after school programs, infrastructure development etc.

Measurement Tools: 

• Employment records from schools
• Community feedback sessions

• Tracking participation of community partners involved in delivering after-school programs, WASH services, textbooks, etc.

Alignment with UN SDGs:

• SDG 4 (Quality Education): Our efforts directly contribute to ensuring inclusive and equitable quality education and promoting lifelong learning opportunities.
• SDG 5 (Gender Equality): We specifically target gender disparities in education, supporting initiatives that empower girls and women.
• SDG 8 (Decent Work and Economic Growth): By improving school operations and sustainability, we contribute to job creation and economic growth within communities.

• SDG 17 (Partnerships for the Goals): Collaborating with local and international organizations to scale impact and ensure sustainability of our interventions.

Using Data to Inform Strategy:

Jackfruit Finance regularly reviews these indicators through internal monitoring systems (primarily our in-house app) and external evaluations conducted by third-party organizations. This data not only measures our progress but also informs strategic adjustments to enhance the effectiveness of our interventions. For example, if data shows a lower than expected improvement in student performance for girls compared to boys, our teacher upskilling partners might increase the focus of their training curriculum to address gender dynamics.

Jackfruit Finance harnesses cutting-edge technology to expedite the loan application process and tailor financial products to the unique needs of each school. 

Our in-house app uses Appsheets as its front end, with Google sheets as its back end. This nimble and reliable tech stack has allowed us to continuously outcompete our competitors when it comes to credit scoring accuracy, loan turnaround times, and collections. We anticipate the current stack can scale to a GLP in the 10s of millions USD, while minimizing our build cost significantly. 

We also use Google’s Cloud Machine Learning to assist us in making credit scoring decisions, making Jackfruit a leader in the field of applying cutting edge technology to lending. This lets us make far better decisions than our competitors about credit risks, as most typically still use a manual review process. We have found that our Machine Learning algorithm provides consistently accurate predictions about the likelihood of a customer to default. That said, at present we use this as an additional data point, not a deciding factor as we are yet to gather enough data for pure algorithmic decision making to be prudent from a risk standpoint. We do intend to end up there in time. 

Jackfruit’s system manages customers and loans across the entire life cycle of a borrower. To begin with, we collect important information such as school name, location, registration number, corporate identity verification and much more, seen in the screenshot to the right. This helps us maintain an up to date comprehensive CRM of all Jackfruit’s customers and potential leads, while ensuring that we are lending to verified institutions. 

When a customer wants to apply for a loan, we open up a credit application for them. Because our app works on both mobile and desktop devices, and online and offline, our field team is able to capture this information in the field in real time with our customers, building trust and relationships. Meanwhile our credit, financial, and legal teams sit in our Nairobi central office, reviewing applications as they come in. This creates enormous efficiencies compared to our paper based competitors, reducing our staffing needs while still serving broad areas of the country. In fact, some of our employees already manage GLPs of over 50 million KES, a number far larger than most competitors. 

After processing a credit application, our system also serves as a core banking system, managing loan disbursements and allocating payments to principal, interest, fees and other charges as required. The system also tracks collateral and defaults through specialized dashboards, facilitating seamless monthly collections. This centralized tracking lets us make accurate and informed decisions about loans and customers across their life cycles.

Jackfruit’s application also provides real time dashboards to help in making business decisions around HR, operations and product design. 

Last of all, we also provide real time metrics to our investors. This dashboard displays everything from the amount of loans we have originated to our late collections figures, providing complete transparency into Jackfruit’s operations. 

Jackfruit Finance has 22 full-time staff and 3 part-time staff.

Having launched in November 2021, Jackfruit Finance has been in operation for 2.5 years now.

Jackfruit Finance is deeply committed to fostering diversity, equity and inclusion (DEI) within our organization. This commitment is reflected in our hiring practices, workplace policies and the overarching culture we cultivate. Our approach to DEI is informed by an understanding that a diverse workforce enriches our capabilities and enhances our ability to serve diverse communities effectively. This is exemplified by:

Diversity of Jackfruit’s Leadership Team: Our leadership team is a testament to our commitment to diversity. Comprising 70% East African members and a gender balance where 50% of our senior team members are women, our team not only mirrors the diversity of the communities we serve but also brings a wide range of perspectives that enhance our decision-making and innovation. Key leadership positions, including our Financial Manager, Head of Legal, Credit Analyst and Head of Grants and Impact, are held by women, demonstrating our commitment to promoting gender diversity and leadership in finance and technology sectors.

Equitable Opportunities: We are dedicated to creating equitable advancement opportunities for all team members. This includes tailored professional development programs, mentorship opportunities and transparent promotion paths that are accessible to everyone, regardless of their background.

Inclusive Work Environment: We strive to maintain a workplace where all employees feel valued, respected and included. This is achieved through open dialogue, providing platforms for employees to voice concerns and contribute ideas on improving inclusivity.

Recruitment Practices: We have implemented structured interviews and standardized evaluation criteria to minimize any bias in our hiring processes. Our job postings are disseminated through diverse channels to reach a broad audience, ensuring a diverse applicant pool.

Professional Development: We offer workshops and training sessions designed to enhance skills and knowledge, tailored to the needs of diverse groups within our workforce. This supports career development and helps in addressing equity by providing all employees with the tools they need to succeed.

Jackfruit Finance operates with a B2B model designed to provide both social impact and sustainable revenue. Our model addresses the critical gap in educational financing by offering customized financial solutions that specifically target low-fee private schools, enabling them to improve infrastructure, enhance educational quality and ensure stable operations. 

Key Customers and Beneficiaries:
Our primary customers are low-fee private schools in underserved regions of East Africa, particularly in Kenya. These schools serve as crucial educational institutions for communities that are often neglected by the public education system. The ultimate beneficiaries of our services are the students and families who gain access to improved educational opportunities, and the broader community that benefits from the socio-economic upliftment associated with better education.

Our products include:

• Project and Asset Loans: To enable schools to build new classrooms, purchase equipment, and make other capital improvements that enhance the learning environment.
• Working Capital Loans: To provide schools with the liquidity needed to manage day-to-day expenses such as payroll, maintenance and other operational costs.
• Flexi Loans: Tailored for schools that may need more flexible repayment terms due to irregular cash flows and insufficient collateral.
• Impact-Linked Loans: This innovative model offers favorable terms based on the achievement of specific educational outcomes, incentivizing schools to focus on delivering quality education to enhance student performance.

Revenue Model: We generate revenue through interest on loans and fees for services. A portion of our revenue is reinvested into our social impact/capacity building programs.

Capacity Building Services: Partnerships with other organizations allow us to provide schools with access to additional services such as teacher upskilling programs, clean water, architectural design, after-school programs and educational materials. 

Delivery of Jackfruit’s Products and Services:

Our services are delivered through a technologically advanced platform that facilitates easy application processes, quick loan approvals and efficient fund disbursement. This platform uses data analytics and machine learning to assess credit risk and tailor financial products to the specific needs of each school.

We maintain a strong field presence, with teams that work directly with schools to understand their needs, provide financial literacy training and ensure that the financial solutions we offer are well-aligned with their capacities and goals.

Additionally, we incur minimal expenditure on direct advertising as most of our clients come from customer referrals, and a substantial portion are repeat customers.

Why Customers Want and Need Jackfruit's Services:

• Demand for Quality Education: Despite the availability of public schooling, there is a significant demand for higher-quality education that low-fee private schools are often better positioned to provide. However, these schools frequently lack the resources to expand or improve their facilities and programs. Accessing affordable financing can be transformative for these businesses.
• Financial Exclusion: Traditional banks and financial institutions often overlook low-fee private schools due to their irregular income patterns and lack of formal financial management. Jackfruit Finance fills this gap by offering specialized financial products that accommodate the unique financial cycles of educational institutions and upfront digitization of their financial records and other performance metrics that enable accurate credit assessment.

Jackfruit Finance is strategically designed to achieve financial sustainability by diversifying our revenue streams and ensuring that our services are both impactful and financially viable. Our current revenue streams include:

• Interest on Loans: Our primary source of revenue comes from the interest charged on various loan products offered to low-fee private schools. The interest rates are competitively priced to balance affordability for schools with sustainability for our operations.
• Service Fees: We charge loan processing fees and late penalty fees to augment our revenue and encourage timely repayment. 
• Grants: As part of our funding strategy, we actively seek grants and and impact investments from philanthropic organizations and international development agencies that support educational initiatives. These funds are typically used to subsidize the cost of capital to the most underserved schools or to fund specific projects that may not be immediately revenue-generating. For instance, we have received a $1M USD grant from USAID Catalyze EduFinance (through Palladium) to design and pilot our impact-linked loans which specifically target schools with a fee threshold of $400 USD per student annually. Additionally, we have project-specific grants, from partners like Global Schools Forum, that have allowed us to support services targeting the early childhood segment (0-6 years). Having dedicated funding for this population that currently makes up a smaller fraction of our beneficiaries is essential to adequately meeting their needs.
• Investment Capital: To scale our operations and expand our reach, we raise capital from banks, venture capitalists and impact investors who are interested in combining financial returns with social impact. This includes equity investments and debt financing. Notable contributions include investments from I&M Bank, DEG and IDP Foundation

Evidence of Success:

• Revenue Generation: Since inception, Jackfruit Finance has consistently grown its loan portfolio, with current gross loan disbursements exceeding $3M USD. The interest from these loans has enabled us to cover operational costs and reinvest in our platform and services.
• Grants Support: We have successfully secured several grants from major philanthropic organizations such as USAID (through Palladium), Global Schools Forum and Waterloo Foundation, totaling over $1.3M USD, which have supported both operational and exploratory projects.
• Private Investments: We have raised more than $2M USD in private capital funding from investors like Bosch and Chandaria, which has been crucial in scaling our operations and enhancing our technology platform.
• Sustainable Growth Metrics: Our repayment rates are high, demonstrating the viability of our lending model and the trust and value we offer to our customers. Our low default rate contributes significantly to our financial sustainability.

Future Plans for Financial Sustainability:
To ensure long-term sustainability, we plan to continue growing our loan portfolio while maintaining high credit quality. We also aim to expand our offerings to include more value-added services that schools are willing to pay for, such as advanced educational technology tools and comprehensive school management systems. Additionally, we are strengthening our blended capital structure by partnering with more philanthropic partners. This will help us minimize risk and attract more private investors.