Banyan

Education

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Unlocking opportunity through

higher education financing

▶️ Click to watch on Loom

Youth employment crisis: the education gap

Demographic pressure. Swelling youth population in sub-Saharan Africa. (UN WPP 2024) (ILO 2024)

Under-employment and Informality. Structural problems are disguised by employment rates (ILO 2025)

• Many working far below skill level to survive, including working poverty
• Informality by default – no contracts, no protections, no progression

New education chasm. Secondary completion is rising, but higher education enrollment lags severely.

⇒ Growing risks of instability. NEET (not in employment, education, and training) and under-engagement in global south is rising, and is the largest contributor to political instability (Demeke 2022)

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98%

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45%

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9%

Banyan Education

Higher education: pathway to opportunity

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Maximum impact: Higher education has the greatest private and public outcomes for families and communities (Shang 2017), unlocking the fullest value from decades of health, nutrition and education investment.

Financial barriers: limited student financing options (public or private) are a major barrier to improving enrolment rates.

Proven model: higher education financing in the global south has been implemented in multiple countries successfully. The model is now being replicated in more places by more providers.

⇒ Demand exceeds supply: loan providers access to capital is the primary restriction preventing more students accessing finance

Snapshot: Lumni (South America), Chancen (Africa)

• 30,000+ students financed
• 85% graduation rate
• 78% formal employment rate
• 51% female members
• 95% from low income backgrounds
• 3.5x Annual Median Income (Africa only)

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Banyan Education

Income Sharing: borrowing from future earnings

New context, new challenges: Income Sharing Agreements (ISA) are the private adaption of publicly financed schemes. Comparison:

• Similarity: ISA repayments are contingent on a living income to prevent hardship
• Difference: Fixed number of repayments prevents debt lingering for an extended period of time
• Difference: Total repayments capped to protect high earners from excessive repayments

Patient capital: obtaining qualifications and securing employment takes years. Time from loan origination to the first repayment can be 5 years.

⇒ Scale requires substantial and patient capital

Pioneered in Australia: developed by Bruce Chapman and launched in 1989, the Higher Education Contribution Scheme (HECS) is now deployed globally including in the UK, Netherlands, and Japan

• HECS repayments are contingent on a living income to prevent hardship
• Low interest loan
• ⇒ Enrollments increased. Gender equity improved.
• ⇒ Financially sustainable.

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Banyan Education

Global Education Fund: sustainable impact

Private and philanthropic capital working together to provide higher education loans to hundreds of millions of young people. Providing investors with:

• Diversification: exposure to many providers, schools, qualifications, countries and currencies
• Security: investment will be secured by the loans of employed graduates, rewarding success
• Reporting: impact, performance and reporting and accountability tools

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“With 70% of the entire population under 30, youth are one of Africa’s greatest reasons for optimism” (UNESCO 2023)

Supporting the leading, local, ethical ISA providers will:

• Improve cashflow: acquiring the income stream of specific loans transfers risks from originators to investors.
• Unlock capital: existing risk tolerant capital can be reinvested many years earlier, so that providers can apply learnings and grow faster.
• Transparent and collaborative: Banyan will aggregate and share data, technology, and knowledge with partners to learn and grow together.

Impact tithe: 10% impact tithe (performance fee) on yield above portfolio targets will support the development and flourishing of higher education in the global south for the most vulnerable.

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Banyan Education

Pilot Investment

Partners

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• Launch: 2025
• Size: USD $2m
• Students: 500 across 4 countries, 2 providers
• minimum 50% females
• minimum 80% low income
• 20% sponsor children–close the education loop
• Target IRR: 6%

Pilot objectives:

• Validate transaction structure, modelling, and data
• Impact study and modelling to prepare for launch of US $100m Global Fund

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Banyan Education

Sources

• UN WPP (2024) – World Population Prospects (2024) - processed by Our World in Data. United Nations, “World Population Prospects” [original data].
• ILO (2025) – World Employment and Social Outlook: Trends 2025. Geneva: International Labour Organization.
• ILO (2024) – Global Employment Trends for Youth 2024. Geneva: International Labour Organization.
• Shang (2017) – Gao, Shang; Darvas, Peter; Shen, Yijun; Bawany, Bilal. 2017. Sharing Higher Education's Promise beyond the Few in Sub-Saharan Africa: Elargir l’opportunité au-delà de l’élite. Directions in Development—Human Development;. © World Bank. http://hdl.handle.net/10986/27617
• Demeke (2022) – Youth unemployment and political instability: evidence from IGAD member countries, Yemareshet Hailu Demeke, Cogent Economics & Finance (2022), 10: 2079211
• UNESCO (2023) – https://www.unesco.org/en/articles/reinforcing-higher-education-africa

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Team

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Banyan Education

Structure

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[Preview] Investigations and Modelling

Banyan: TBD (less than 6%) - conservative

Approach:

• Minority investor (< 50% of funding)
• Prioritise low risk members (providers expect 60% of members to cover defaults, unemployment, etc)

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Providers: target ~ 6% nominal

Risks:

• Unemployment (e.g. 15%)
• Default (e.g. 10%)
• Currency deprecation (e.g. 6%)

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