Financing African students at leading global universities

8B is a loan program for African graduate students who are admitted into the world’s leading global universities, but face financing shortfalls. We de-risk investors in the loan pool using philanthropic guarantees, thereby making African student borrowers attractive to lenders, and unlocking financing at scale.

Access to US colleges is a proxy for access to the innovative ideas and tools needed make the African continent compete in the knowledge economy of the 21st century, yet Africa has fewer students in the US today than in 1985. The numbers are driven by a lack of financing: over 65% of African students in the US rely primarily on private sources for funding, limiting access to the very wealthy, those lucky enough to win a scholarship, or to those able to get into significant, costly debt. Because of concerns about risk, affordable loans are inaccessible without a co-signer.

It was not until I faced the prospect of forfeiting my doctoral studies at Oxford that I became deeply aware of the fact that African access to global universities relies exclusively on the twin lottery of parental wealth and scholarships. Yet education is a powerful tool for accelerating social mobility and disrupting networks of patronage at home, and unlocking opportunity by challenging narratives about the African continent abroad.

Convinced that luck is a poor basis upon which to build world class-human capital for a continent hoping to truly ‘rise’, I embarked on a technology-enabled, market-based solution.

• Graduate at least 20,000 leaders and problem-solvers in top global universities in 15 years
• Double number of African students in the US
• Use technology to develop a credit rating system that allows borrowers to understand and lend to African student borrowers
• Place highly qualified Africans in all sectors in countries of origin
• Raise standards of achievements in domestic education systems
• Strengthen Africa’s presence in global centres of influence
• Transform the African narrative over time as fellows work in global companies, establish startups, write books and editorials

Keep track of students who receive loans from the program - Graduate 20,000 African students

Track proportion of African students as proportion of total international student body in the US - Double number of African students in the US

Number of fintech companies that enter the market - Develop a credit rating system that allows borrowers to understand African student borrowers

Guarantees have been used to de-risk investments in areas as diverse as micro-credit and incentivizing the development of health technologies. However, the tool has yet to be adopted to the African human capital development space, where it holds great promise, given the inability of philanthropy to address funding demands at scale, and the new developments in financial technology that allow innovative credit scoring. For Africa, which has the fastest growth in university enrolment (and the youngest population) in the world, in a context of scarce philanthropic capital, an innovation that creates a market-based solution is particularly useful and timely.

By removing barriers to accessing global education, 8B tackles entrenched and generational multipliers of privilege, something my father, my sister and I have faced: exclusion from opportunity on account, not of merit, but of financing. Discussions with hundreds of people has convinced me that this exclusion, and the underlying inequality that drives it, is acutely felt by Africans everywhere. As a result, almost without exception, every African (and Global Southerner) I have spoken to has expressed great optimism about the necessity of developing a cadre of globally connected, and value-based future leaders through a program such as this one.

First, 8B will be offered as an option to students by financial aid offices of partner universities. Second, students can directly access 8B and its services online directly. Third, we will partner with entities that currently prepare African students to make applications to global universities, and have access to students in their networks. 

We have 12 months of grant funding through June 2018. We will look for additional grants as needed. Once we have investment funds for student loans, we would charge a management fee which will provide a revenue flow.

• Both he student financing space and the African continent, have a bad reputation linked to negative media portrayal.
• People are more comfortable investing  $1000 to 50 Africans to start a basket-weaving business, than investing $50,000 for one African whose education will allow her to create a woven basket industry.
• Many Africa investors expect very high returns because of risk, while we are focusing on Africans in the US, and are therefore offering very different returns.
• Many consider African higher education a luxury, while others consider global education to be a cause for brain drain. 

Solve promises to develop a coveted network of problem-solvers, and a special focus on technology. I am excited about expanding my partnerships in that direction, in particular as I imagine technology will be a big aspect of what we do.

CIPA Cornell Institute for Public Affairs, The Africa America Institute, Morrison Foerster 

Prodigy Finance

MPower Financing