Unlocking Triple Impact: A Local Currency Solution to FX Volatility in African Education Finance

By Isaac Marshall (TLG Capital), Rob Alhadeff (Jackfruit Network) & Corina Gardner (IDP Foundation)

Across Africa, currency volatility remains one of the most significant barriers to delivering truly mission-aligned capital. Despite decades of effort from policymakers, DFIs, and investors, the capital that flows into education and other high-impact sectors is still overwhelmingly dollar-denominated, with the currency risk passed on to borrowers least able to bear it. This may be starting to change.

Thanks to the convening power of the MIT Kuo Sharper Center for Prosperity and Entrepreneurship, the catalytic support of IDP Foundation (IDPF), and the structuring by TLG Capital, a replicable, de-risked structure is now being rolled out in Kenya. It’s designed to support local currency lending to education-focused MSMEs, without requiring burdensome FX hedging or raising interest rates, while also tripling the effectiveness of the philanthropic capital.

The Problem: FX volatility and market distortions force schools to borrow at rates as high as 212% p.a., even when the capital comes from “impact” sources.

The Opportunity: Foundations must give away 5% annually, but endowments can be aligned with mission. When used catalytically, such as through guarantees, this capital can unlock local-currency financing at scale.

The Innovation: A blended structure that removes FX risk. The model uses a Standby Letter of Credit (SBLC) from IDPF fund manager paired with local deployment by TLG Capital. FX risk is shared between IDPF and TLG, allowing Jackfruit Finance (JF) to lend in KES without passing currency exposure to schools.

The Mechanics:

The replicable framework includes:

SBLC equal to the principal amount of the loan put in place between IDPF & TLG

Facility Agreement covering the terms of the local currency loan between TLG & JF

Guarantors Group Agreement between IDPF (and any future follow-on guarantors), TLG, and JF covering the mission-related purpose of the guarantee, handling of currency devaluation, and partnership communication.

The partners will share the legal architecture so other mission-aligned organizations can adopt and scale the model.

“This partnership is a first-of-its-kind and shows the new horizons that open when collaboration is built between impact-first institutions and the private sector. TLG has experience investing across the African continent, but this partnership allows us to reach a segment of the market previously unreachable to us. Through our investment in Jackfruit Finance in partnership with IDP Foundation, TLG is now supporting hundreds of schools in underserved communities, enhancing educational outcomes, and boosting financial inclusion. Jackfruit and IDP are exactly the right partners for this triple impact innovation in blended finance.”— Isaac Marshall, Investment Professional, TLG Capital

Jackfruit Finance: Our mission is direct and time-sensitive: to make education financing affordable, inclusive, and sustainable for the schools that need it most. Every child, regardless of income, deserves access to safe infrastructure, qualified teachers, and strong learning outcomes. Our vision is an education ecosystem where capital strengthens, not strains, school capacity.  JF provides:

• Technology + Field Presence: Digital + field-based credit assessments collecting real-time data from 350+ data points per school
• Tailored Finance: loan products designed for the realities of low-fee schools: flexible terms, quick approvals, and structures that match cashflow cycles
• Capacity Building: Capacity-building through the Jackfruit Hub
• Gender Lens: With nearly three-quarters of partner schools led by women, ensure that credit supports female school owners and expands opportunities for girls

The Impact: A local currency investment allows JF to maintain (and eventually reduce) its already below-market interest rates. This will support expansion from 758 to more than 1,500 schools and increase students benefiting from improved education from 227,889 to over 500,000.

Why FX-Safe Capital Matters: Currency depreciation raises borrowing costs and destabilizes school planning. JF partner schools, 74% women-led, serve low-income communities and need predictable, shilling-denominated financing to invest in infrastructure, staffing, and quality.  Local-currency financing is essential to protecting these schools and sustaining learning outcomes. 

“We charge as little as we can—not as much as the market will tolerate.” —Rob Alhadeff, CEO, Jackfruit Network

The Role of IDP Foundation: Field-Building, Not Just Funding. IDPF is helping prove a new model: philanthropy as market-maker, not just funder. Additionally, the structure TLG has created allows IDPF to see a triple impact on their investment. For every dollar invested IDPF will see:

• A return on that investment through the allocation it is deployed to under the management of IDPF’s endowment fund
• Unlocking the same amount in a FX protected debt investment from TLG to JF
• Increasing our total reach in mission-aligned programming without depleting any of IDPF’s grant-making budget

IDPF guaranteed the first $500,000, with potential to unlock up to $5 million in additional local-currency financing to JF as new guarantors join.

“By using the balance sheet of our endowment as a guarantee, we’re seeing every dollar of philanthropic capital unlock three times its value while increasing our impact” — Corina Gardner, CEO, IDP Foundation, Inc. 

Why This Matters:

     For Investors (TLG): downside protection + tangible impact,

     For Borrowers (Schools): local debt at sustainable rates

     For Philanthropy: mission aligned without reducing grant funding

     For the Ecosystem: scalable, replicable model with open legal architecture