A First For US Banks: 8B Education Teams With Nelnet For $111.6M Project To Boost African Student Enrollment

8B Education Investments founder and CEO Lydiah Bosire is on a mission to provide tomorrow’s leaders with the tools they need to innovate, compete and thrive in the 21st century.

Her five-year-old startup, which connects high-potential African students with colleges and universities as well as financial options, is just the start.

“I am born and raised in Kenya. Only through a series of perfectly timed accidents did I end up on scholarship at Cornell and, later, struggled to attend graduate school because of a lack of financing for African students," she says.

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Across the world, student financing remains a big issue. And Bosire thinks she has the answer and is starting off with a focus on the African continent.

“It’s necessary for Africa to partake in shared prosperity,” she says. “I started 8B in order to fill in gaps I saw from my own experiences as a student who sought to transform the world.”

An American Bank Has Never Done This

At its core, Bosire's 8B helps African students find global universities, finance their attendance, and procure the career support they need to succeed and thrive.

Though charity is one way to level the playing field and bring brilliant African talents into global innovation ecosystems, financing is a larger concern.

The Clinton Global Initiative (CGI), a convention of global and emerging leaders to create and implement solutions to the world’s most pressing challenges, noticed Bosire and invited 8B to their 2022 event. Once there, Bosire scored a partnership with Nelnet Bank NNI to support 8B’s lending program enabling African students to pursue a U.S. education.

An American bank has never done this, Bosire says. Typically, African students need an American co-signer to take on debt. That’s how financial institutions de-risk their investments.

8B and Nelnet are tapping a concept Bosire worked on at the World Bank. The mechanism of enabling risks to be shared, in order for financing to flow to spaces historically risky, is fairly commonplace in development finance.

“We’re tapping into pools of capital that catch your loss pro-rata, across the people who are in that pool of capital when the loss occurs,” Bosire adds. “For Nelnet to hitch their fortunes with a startup required out-of-the-box thinking.”

‘Not Enough African Students In These Spaces’

The number of African students in U.S. universities "has dropped precipitously,” Bosire says. “Back 30 or 40 years ago, nearly 13% of international students in the U.S. came from the African continent."

Currently, that number is about 4%, primarily because other regions have prioritized human capital development, she explains.

“There are not enough African students in these spaces," Bosire adds. "Having cornered the market of 18 to 23-year-olds for the next 20, 30, and 40 years, the more we start investing in that, the better.”

Increasing diversity in schools isn't about handouts. “Most African students are on scholarship and very few of them have a financing solution," Bosire continues. "With a financing solution, that enables the university to step in with some skin in the game, bringing the balance between revenue and diversity concerns.”

The Convening Power And ‘Gravitas’ Of CGI

Nelnet agreed to originate $30 million in loans over a three-year period in support of 8B’s initiative totaling $111.6 million in funding commitments, from a range of partners, at CGI.

The convening mechanism of CGI “carries so much gravitas," Bosire says. "It’s a Rolodex that is bottomless and can bring around the table very unusual partners.”

Nishith Acharya, CGI Senior Fellow, Inclusive Economic Growth, says 8B fits into the organization’s mold of finding better ways to think about long-lasting challenges such as energizing economic innovation and building an educated global workforce.

“Naturally, some students will come home, while some will stay abroad and go to places such as Silicon Valley,” Acharya says on building a global, forwarding-thinking society. “The more we can do to engage them to be as productive as they’re capable of being, the more of an inclusive economy we can build worldwide.”

Beyond 8B, CGI has forayed into financial inclusion through cryptocurrency as consumers more so trust themselves and their embedded networks, blockchains for use in validating the credentials of displaced migrant workers, as well as climate resilience and health equity.

“We’re going to need millions of people who can be mechanics for EV charging stations or can fix these solar panels on your roof. How do we train all these people to maximize opportunities in these new industries, so they can grow fast and address the climate challenges?” Acharya adds. “Those are our concerns."