ABA Editorial · Dec 11, 2025 · 13 min read
Education financing is one of the most persistent constraints on African learning access, and several operators have experimented with income share agreements, pay-after-learning models, and partnerships with banks to bridge the gap. Decagon's partnership with Sterling Bank and the Central Bank of Nigeria was one of the highest-profile examples, and its 2025 collapse offers lessons for the category. This report maps the financing landscape.
Education financing is one of the most persistent constraints on African learning access. The people who would benefit most from training (young adults without existing savings or earning histories, students from lower-income households, career-changers who cannot afford extended periods without income) are precisely the people who cannot finance their own education through conventional means. Traditional student loans, where they exist in African markets, require collateral or guarantors that most prospective learners cannot provide. Government scholarships serve small numbers of students and typically target conventional university programs rather than the newer categories like coding bootcamps. Family support, where available, carries the same affordability constraints as household payment for K-12 education. This gap has motivated several African operators to experiment with alternative financing models including income share agreements (ISAs), pay-after-learning plans, bank partnerships, and employer-financed training. The category is important because it determines whether training programs can reach learners from disadvantaged backgrounds or remain accessible only to those with existing resources. This report maps the financing landscape.
The highest-profile African edtech financing experiment was Decagon's partnership with Sterling Bank and the Central Bank of Nigeria. The model offered pay-after-learning plans that provided trainees with laptops, accommodation, internet access, meal allowances, and stipends during the six-month training period, with no upfront payment required from the trainees themselves. Repayment was structured to begin only after graduation and after the trainee had secured employment, removing the financial risk to the trainee of investing in training without guaranteed outcomes.
The partnership was commercially innovative and addressed the core affordability problem directly. Sterling Bank provided the capital that funded trainee costs. The Central Bank of Nigeria provided regulatory support and endorsement. Decagon provided the training infrastructure, curriculum, and graduate placement services. Trainees received the training they could not otherwise have afforded, in exchange for commitments to repay from post-graduation earnings. The model produced successful cohorts over several years and was cited as evidence that African edtech financing innovation could work at scale.
In March 2025, Decagon pivoted completely away from tech education as Nigeria's economic crisis made the programme cost untenable even with the financing structure in place. Currency depreciation, inflation, and reduced employer hiring appetite combined to undermine the unit economics. The collapse of the programme is a significant cautionary event for African edtech financing, because it shows that even well-designed financing structures are exposed to macroeconomic conditions that can shift rapidly and severely.
Income share agreements (ISAs) are a financing structure where the learner agrees to pay a percentage of their post-graduation income for a specified period, rather than a fixed repayment schedule tied to the original training cost. The ISA structure has theoretical advantages for learners: repayment is proportional to earnings, so learners who struggle to find employment or who earn less than expected are not saddled with unaffordable debt. It has potential disadvantages as well: learners who succeed beyond expectations may end up paying more in aggregate than they would have under a conventional loan, creating a fairness tension between the most and least successful graduates.
ISAs have been piloted in African contexts by several operators, though the category has not scaled to the extent that its proponents hoped. The structural challenges include the difficulty of enforcing ISA obligations in jurisdictions with weak contract enforcement, the administrative complexity of tracking graduate income over extended repayment periods, and the commercial risk to operators if graduate outcomes deteriorate (either through individual underperformance or through broader labor market downturns).
The commercial viability of ISAs depends heavily on the specific cohort of learners, the quality of the training, the accuracy of income forecasting, and the economic environment during the repayment period. Operators who overestimated post-graduation earnings or who operated during deteriorating labor markets have faced significant losses. Operators who have structured more conservative ISAs with realistic income projections have fared better, but the category has not produced the scale that would justify its original positioning as a transformative financing innovation.
Employer-financed training offers an alternative financing structure that avoids the repayment risk of ISAs or pay-after-learning models. Under this approach, an employer pays for training upfront in exchange for a commitment from the learner to work for the employer for a specified period after graduation. The employer bears the training cost and captures the benefit through the employee's productivity during the commitment period. This model works for specific training categories where employers have clear demand for graduates (most commonly tech roles where developer shortages persist) and can afford the upfront investment.
The employer-financed approach has advantages over ISAs in that repayment is guaranteed by the employment contract rather than by future individual performance. It has disadvantages in that it requires upfront employer commitment, which limits the number of learners who can be served to the number of positions employers are willing to fund. It also creates lock-in for graduates that some view as restrictive, though the commitment period is typically limited to 12 to 24 months.
Scholarships and grants from foundations, development partners, and individual benefactors support a meaningful portion of African edtech learners at various scales. The Mastercard Foundation's scholarships programme has funded thousands of African students through university and alternative education pathways. The Tony Elumelu Foundation provides funding and training to African entrepreneurs. Multiple smaller foundations and bilateral donors support specific training programs. The scholarship layer is essential for reaching learners who cannot access any form of repayment-based financing, but its scale is limited by donor capacity and is unlikely to close the financing gap on its own.
Government financing remains the largest source of education funding in most African countries, through public university subsidies, national loan schemes, and TVET institution operational budgets. Kenya's Higher Education Loans Board (HELB) and similar institutions in other countries provide student loans to qualified applicants for approved programs. These government loan schemes have reached substantial numbers of students but are typically limited to traditional academic programs and do not cover alternative learning categories including coding bootcamps or skills training. Extending government financing to new edtech categories would expand access, but requires regulatory and administrative changes that have been slow to materialize in most markets.
Three indicators will shape African edtech financing. First, whether any operators successfully replicate the Decagon partnership model with improved resilience to macroeconomic pressures, or whether the collapse discourages further experiments in this direction. Second, whether employer-financed training expands across more sectors and more markets as employers recognize the commercial logic. Third, whether government loan schemes extend to alternative learning categories, unlocking public financing for bootcamps, online degrees, and professional upskilling that currently depend on private financing alone. The financing constraint is the binding limit on how many African learners can access training that would otherwise be affordable only to those with existing resources, and its evolution will shape whether African edtech reaches the populations that need it most.