SDG Impact Finance Initiative with the support of Convergence awarded an expansion grant of USD 300,000 to Girl First Finance (GFF) to support young women’s education and professional development worldwide through student loans and personal empowerment tools.
Accessing higher education presents a significant challenge in Africa, especially for girls. Even for those who manage to enroll in post-secondary education, accessing affordable loans is often difficult. A survey of 2,500 respondents across Africa and MENA revealed that nearly 50% of African girls enrolled in higher education resort to seeking male "sponsors" to bridge funding gaps. However, this form of "sexploitation" is often overlooked by families facing poverty, who are desperate to cover their children's education costs. The same survey also uncovered that over 45% of the girls enter intimate relationships to pay for education, with 76% of them being abusive.
To combat the exposure of young women and girls to abusive pressures, GFF introduces an innovative collateral structure within its loan scheme, offering urgent relief to those excluded from traditional banking services. The solution provides education loans to vulnerable borrowers that are often overlooked by conventional banks, thus addressing the widespread gender-based sexual exploitation faced by adolescent girls and young women during education, training and early employment. In addition to the banking solution, GFF offers a range of services including counselling, mentorship, budgeting tools, loan assistance, and job-seeking support, through its digital platform, or ‘super app”.
GFF to date has secured funding from the Porticus Foundation and the Waterloo Foundation. There are also discussions of further funding opportunities underway with organizations including Family Bank Group, Kiva and Safaricom Foundation, as well as DFC, eagle venture fund and USAID. The expansion grant will help GFF to scale-up its current activities, as well as market the app across Kenya. In the future, GFF has plans to further scale the app beyond Kenya.
Design question and learning potential for the market: How can blended finance facilitate the creation of a digital platform that offers higher education loans to vulnerable girls without credit history while also empowering them?
GFF employs a blended capital approach, attracting both concessional and commercial lenders to support its innovative loan scheme tailored for individuals unable to access traditional bank loans. Recognizing the financial obstacles faced by many, particularly girls, in completing their vocational education (TVETs), GFF develops a collateral package that helps support people with their “last mile” of education. Under the package, GFF retains a percentage of the loan amount from tuition payments to TVETs as collateral in exchange for guaranteeing financial stability to these students. When students cannot pay for their education, GFF would cover the remainder of the tuition expense, ensuring financial stability for the TVETs. An additional percentage of collateral is also held by GFF in escrow from borrowers until full repayment is collected. With the collateral retained from borrowers, GFF can offer loans at reasonable interest rates on par with conventional bank loans (18%) to vulnerable borrowers in the absence of a previous credit history. Furthermore, the repayment terms are also designed to be commercially viable, with extended loan tenors and loan repayments capped at a percentage of the borrowers’ starting salaries.
In addition to providing, GFF offers empowerment support services aimed to enhance borrowers’ repayment performance with any lending institutions, including income generation opportunities, emotional wellness support, financial literacy, community-building tools, mentorship, and protection from sexploitation, through its digital platform (“super app”). The platform operates on a “freemium” subscription model which offers basic features that are free to all and charges a nominal fee for further income-building features. Ultimately, GFF aims to transition away from concessional funding and rely solely on commercial investors for long-term sustainability.
