Inua Fund for Health & Education (F4HE)

Drawing upon the lens of the Human Development Index (HDI), at Inua, we believe that a country’s people and their capabilities are the ultimate criteria for assessing its development (and the sustainability of this development), not economic growth alone. The Human Development Index delineates the key dimensions of human development: a long & healthy life, being knowledgeable and having a decent standard of living.

Uganda had the world's longest school disruption due to the Covid-19 pandemic, suspending all learning for 2 years. This approach led to a surge in dropout rates, teenage pregnancies, elevated graduation ages, increased family expense on education and culminated in a total loss of confidence in the public school system (and ultimately a flight to more reliable private schools and international curricula).

Moreover, Uganda spends materially less of its budget and earnings on education and health than its neighbours and other regional and global comparables (9% in Uganda vs 16% in East Africa), and yet starting from a very low asset base to begin with.

Given this public sector neglect, in Uganda, it is imperative that the private sector pick up the slack and that substantial private sector investment and support is directed to health and education. Inua Capital seeks to raise and manage a fund that specifically targets and seeks to accelerate progress along these core dimensions of human development in Uganda.

F4HE focuses on investments in two core sectors: Education and Healthcare. The purpose of this fund is to enable private sector development to supplement public sector deficiencies in these essential services, and thus increase Ugandans’ access to these basic needs.

Healthcare investments are essential to improve infrastructure and address the high disease burden. Education investments are critical for reducing unemployment and bridging the skills gap.

Mezzanine debt is ideal for these sectors – providing capital for expansion without ownership dilution and offering flexible repayment structures that align with business cash flows. Additionally, investments in these sectors contribute significantly to social impact and sustainable human development by improving living standards and advancing the United Nations’ Sustainable Development Goals (SDGs).

F4HE will provide concessional credit – this financing is highly additional to the market, as banks will not fund where there is insufficient collateral, and banks will not help professionalize and build capacity and governance in these SMEs (to ensure their permanence and long-term sustainability).

The Fund model is a blended finance one - F4HE is seeking to raise concessional and philanthropic capital at SOCAP25 to blend, catalyse and crowd in local Ugandan private institutional capital to invest in these high-priority SDG sectors. Owing to its low-risk income generation, this fund would be considered an investment portfolio fit by local institutional investors (like pension schemes), if sufficiently de-risked by catalytic capital co-investors.

Raise: $20 million ($10 million philanthropic capital and $10 million local Ugandan institutional capital)

Structure: Evergreen (open-ended) investment vehicle

Returns: Target gross IRR of 8-10% for commercial investors (first loss provided by catalytic investors)

Target Impacts:

1. 100,000 students and young adults to access a quality education and career/job/skill support

2. Increased access to health services for over 100,000 people (with increased bed capacity of c. 1,000 beds)

3. Reduced maternal mortality rate