While youth unemployment in many developing countries exceeds 30%, employers report that they can't find enough qualified graduates to hire. The problem is so large that despite the number of unemployed locals, many companies resort to hiring expensive expats from abroad. It is clear that a lot of value would be created if the most talented local high school graduates got high quality degrees, so they can fulfill their own country’s labor market demand.
Graduate wage levels reflect this value creation: the increase in income from a quality degree often provides the student with an ROI of 50-80%. Despite these returns, 60 million talented students graduate from high school every year without a viable way to pay for higher education. They can't get a loan and scholarships are rare. This discrepancy provides a huge opportunity for economic growth and investment.
What if, instead of limiting these young students’ futures because of their family financial reality, we provide investors with the opportunity to back the future leaders in engineering, science, medicine, and business for a stake in their future income? Such a partnership benefits both student and investor, socially and financially. In 2015 Brighter Investment supported the first high potential students in Ghana followed by a second cohort in 2016 and a third cohort in 2017. The deal is: Brighter Investment pays for their higher education, and after graduating students repay their investors a percentage of their income, typically 25% for 6 years.
The first cohort of graduates are working and the degrees increased their income 5X. They are outperforming their peers, outperforming BI’s projections, and students’ repayments are providing investors with an attractive return.
“Completion of my degree seemed a hopeless dream. I am very privileged to be a part of the big picture of investing into talented students…”
— Charles Okai Addai, Brighter Student
Capital raised figures include amounts raised both on and off platform. Amounts raised off platform or committed have not been independently verified by SVX.