The purpose of the Fund is to provide customized financial services for the education sector by supporting secondary, higher and vocational education in Africa. A well-trained workforce and generally well-educated citizens are crucial factors for the long-term development of a country. Yet the low quality of and limited access to education pose major challenges in many African countries. Financing education for their children remains a strong and often insuperable burden on many families in
Africa. Public education sectors alone are not capable of addressing these problems, which is why the private sector plays an important role in complementing the offer to finance education. Education loan and savings products for learners and their families can be a response to the financial burden that many households face.
KfW on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) has made an initial equity investment of Euro 15 Million to sponsor the REFFA Fund and the target Fund size is USD 70 Million. This investment will be used to provide funding to a number of African financial intermediaries (banks, microfinance institutions, NGOs, etc.) that have an existing education portfolio targeting secondary and tertiary schools and/or students.
BlueOrchard is very proud and excited to manage the Regional Education Finance Fund for Africa (REFFA), the first of its kind in Africa. “We are convinced of the impact that the REFFA Fund has on the African education sector. REFFA will open up a new market segment in a region where education is at the core of the existing and future generations,” states Peter A. Fanconi, Chief Executive Officer and Member of the Board of Directors of BlueOrchard. In 2015, REFFA will open its investors’ base to the private sector. Thanks to its innovative capital structure, the funding from BMZ will leverage private capital by offering downside protection to commercial senior investors interested in promoting education development in Africa.