LAPO Microfinance Bank has introduced loan schemes targeted at reducing financial barriers to education for low-income families and private school owners across Nigeria.

The initiative, launched under its EduFinance Loan Products, comprises two packages: the School Improvement Loan, designed for proprietors to enhance infrastructure and learning facilities, and the School Fees Loan, which provides parents with short-term credit to pay tuition.

According to UNESCO, more than 20 million Nigerian children are currently out of school, with many families citing financial constraints as a major factor. Low-cost private schools, which often serve rural and urban poor communities, also struggle with inadequate infrastructure due to a lack of access to credit.

Oluremi Akande, Director of Marketing and Corporate Communication at LAPO, explained the rationale behind the products.
“Access to finance remains one of the biggest barriers to education in underserved communities. We designed these products not just to support education, but to empower families and school owners with dignity and flexibility,” Akande said.

The School Improvement Loan offers up to ₦3 million for proprietors to expand classrooms, provide furniture, and adopt digital learning tools. The School Fees Loan allows parents to borrow up to ₦100,000 to spread tuition payments, preventing children from dropping out.

Interest rates for the loans range between 3% and 5% monthly, depending on loan type, amount, and repayment duration. These terms, LAPO said, are structured to be more affordable than informal lending channels where rates can exceed 20% per month.

Since its rollout, the EduFinance scheme has disbursed more than ₦4 billion, supporting 45,000 students and 3,800 school proprietors across the country.

For some families, the loans have prevented disruptions in schooling. In Kaduna, Mrs. Hafsat Danladi, a mother of five, said the School Fees Loan allowed her two sons to remain in school after her husband lost his job.
“We were struggling to meet up. The school was about to send them home. LAPO came in just in time,” she said.

Education financing experts say the intervention addresses a significant gap. EFInA’s 2023 report showed that while 64% of Nigerian adults are financially included, targeted education loans remain underdeveloped in the country’s financial system.

Lilian Ehigiamusoe, Executive Director of Operations at LAPO, noted that women make up a large portion of the beneficiaries.
“A significant percentage of our school proprietors are women. When you empower women to run schools effectively, you are not just improving education—you are transforming communities,” she said.

A joint report by the World Bank and the National Bureau of Statistics indicates that households in the bottom 40% income bracket spend as much as 30% of their earnings on basic education, often forcing children out of school during economic shocks. LAPO’s EduFinance model, the bank said, uses community trust systems and flexible repayment to reduce default risks and prevent families from turning to loan sharks.

The bank disclosed that plans are underway to extend the product further into rural communities while pairing credit access with financial literacy programs.