‘Enabling low-income schools with loan facility will improve access to basic education’
Before now, managers of low-income schools have lamented inability to obtain loan from financial institutions, as they do not consider them creditworthy.
But the firm has broken new ground in its push to increase access to funding for low-fee private schools.
Founder, Segmentico limited, Wale Odeja, noted that low-fee private schools are filling the gap and providing formal education to children and wards of low income families, in a country where over 70 million people live below the poverty threshold of $1.90 a day (N685.43).
He said since most of the low-fee schools are run by private individuals, most banks will not lend to them, highlighting that there are between 18,000 to 25, 000 private schools in Lagos alone.
Odeja added that these schools need financial empowerment and guide to enable them invest wisely, expand access to numerous children scattered in various communities of the country, as well as improve learning outcomes.
He said: “We have disbursed over N10 million worth of loans and the repayment rate has been impressive. But we have limited funds to provide loans to all applicants while the maximum loan amount is too small for some applicants. These schools need money to put up additional classrooms or a laboratory or some other facilities. Most of them borrow from private moneylenders; paying up to 60 per cent interest a year. This slows down improvement and expansion at these schools.
“We developed replicable sector-specific systems and processes, which allow for efficient and effective operations. The company currently serves more than 40 schools in Lagos, and additional capital will allow the company to extend its successful model to more than 5,000 schools throughout the country over the next five years.
“We have mapped out plans to expand across the country through strategic partnerships. It will continue to emphasise on building capabilities in risk and control, analytics, underwriting, information technology, people and brand to ensure that we deliver growth which is sustainable with robust asset quality.”
Odeja said the firm’s model is working because people have little faith in government schools and are willing to pay more for quality education, while schools with no access to bank credit are proving to be bankable as borrowers.
Head, Rosemanuel Educational Services, Abioye Funmilola, affirmed that the school’s partnership with the financial institution has enabled them to reach out to more children with all the opportunities that a good education can provide.