ImpactAlpha, June 23 — Income share agreements, or ISAs, allow students to pay for school with little to no upfront tuition in exchange for a fixed percentage of their future income. Some models have been called out for predatory practices, pushing investors to call for more data and greater accountability (see, “Accountability for outcomes can spur impact investments in educational income share agreements”).
“Our vision is to provide a fair and ethical financial product to allow students to access high-quality education,” said Batya Blankers of Chancen International, the Rwandan nonprofit that will manage a new fund backed by Ceniarth.
The Future of Work Fund is looking to raise $21 million to provide financing for 10,000 young students, primarily women and others from traditionally excluded groups. An anchor investment from the UBS Optimus Foundation last year helped Chancen launch the fund, which has since attracted commitments from the U.S. Development Finance Corp., Klett Group, Kaizenvest and Cassiopeia.
Grants from Vitol Foundation and other philanthropic donors made it possible for the students to hold an equity stake in the fund, creating student representation at the board level. The fund plans to expand to other countries in Africa, with Kenya up next.