Project: Jackfruit Finance and Instill Education Pay For Results School Lending
State of development: Current
Stage of development: Early stage
Type of instrument — Impact Bond: No; Outcomes Fund: No; Social Impact Incentives (SIINC): No; Social Impact Guarantee: No; Payment-by-results (no pre-financing): Yes; Technical Assistance and Market-building program: No; Other: No
Rationale for using outcome-based finance: In the short term, Jackfruit and Instill need the Outcomes Accelerator funding to allocate staff to this project to launch a pilot and study its initial results. However, in the long term, this project should be an extremely cost effective method for improving the quality of teaching and leadership practices in participating schools, ultimately improving student outcomes. Jackfruit's average loan size is $25,000, with an average school educating 376 students. Instill Education's programming typically costs $30 per month per school. If the average interest reduction equates to 1% of loan value, this means that for a two year intervention the total cost of the intervention is $970, or <$3 per student. This improvement can also be rolled out rapidly, given that Jackfruit is currently growing 30% each month, a rate of growth that Instill anticipates it will be able to meet.
Key challenges to launch: The primary issue Jackfruit and Instill face in proceeding with this project is the lack of evidenced results which can demonstrate to domestic governments and grant providers that the RBF will have the intended outcomes at very low cost. While there is significant interest in improving learning outcomes, there is little statistical evidence to date showing that a pay-for-results program can improve children's learning outcomes, and is an effective manner of doing so. This pioneering study will provide the data needed to bring this model to Jackfruit's global network of funders and scale it massively. Neither Jackfruit nor Instill currently have the budget to staff this project internally, to pay the schools, or to hire a monitoring and evaluation firm to study the outcome. The Outcomes Accelerator will resolve this funding issue. 
Social/developmental challenge: Due to failures of the Kenyan public school system to provide enough school facilities to meet domestic need, private primary school establishment and enrollment has grown rapidly in Kenya, doubling from approximately 5,000 students enrolled in 2010 to 13,700 enrolled in 2018. However, this has not necessarily corresponded to better educational outcomes; less than 50 percent of Kenyan girls in third grade can do second grade level math, English, or Kiswahili. Moreover, there has been little institutional support provided to these schools to help them improve their ability to effectively teach children. Challenging economic conditions mean that most school owners providing affordable education opportunities for children and youth often choose to prioritize expenditure that keeps school facilities open and available, and not those which would improve learning outcomes for students such as teacher upskilling. 
Expected intervention model: Jackfruit Finance and Instill Education will partner to launch a study of an innovative, results-based financing mechanism that will aim to support improvements in learning outcomes within Kenyan primary schools by facilitating access to interest rate reductions in loans for educational providers. The Outcomes Based Accelerator will enable this partnership to scale this model with data on its impact.

Jackfruit Finance has a proven record of financing low fee schools in Kenya, achieving a $1.7 million portfolio in 9 months and maintaining excellent repayment rates. Jackfruit is expanding geographically and engaging investors, including high net worth individuals, venture capital funds and private banks, while aiming to partner with development financial institutions for further growth. We anticipate working with over 2,000 schools within 3 years.

Instill Education is a Pan-African, private higher education institution accredited by the South African Department of Higher Education and Training and has been in operation since 2015. In late 2021, Instill Education launched an online professional development platform for teachers, Upskill@Instill, in collaboration with the Mastercard Foundation. Through direct partnerships with Ministries of Education in Ghana, Kenya, Nigeria, and South Africa, Upskill has reached a user base of 60,000+ users within a little over a year.
Policy sectors — Employment and private sector development: No; Education: No; Social protection: No; Criminal justice: No; Health: No; Agriculture: No; Environment and climate change: No; Water, Sanitation and Hygiene: No; Energy: No; Humanitarian: No; Early Childhood Education: No; Other: Yes
Primary SDG goal: 8
Country income classification of beneficiaries — Low-income: No; Lower-middle-income: Yes; Upper-middle-income: No; High-income: No
Notes: Data for this pipeline project was last updated in August 2024
Delivery location: Kenya