Webinar: FIF UK & EduFinance on the Affordable Non-State School Sector

In March, Financial Inclusion Forum UK and Opportunity EduFinance co-hosted a webinar titled "Financing low-cost private education: Increasing financial access to close the 66 million seat gap in non-state schools."

With over 130 attendees, the webinar proved successful in driving robust conversation around the non-state school sector research presented by Scott Sheridan, Director of Operations for EduFinance, and following panel discussion moderatored by Professor James Tooley with our esteemed panelists. Attendees posted dozens of questions for panelists in the Q&A forum throughout the webinar. A few key highlights from panelist responses are shared below.

“Access to financial services is an enabler of achievement to other sustainable development goals, including SDG 4 quality education.” - Andrina Schwart, Head of the Financial Inclusion Initiative, Credit Suisse

Why did Opportunity Bank Uganda first decide to begin lending to the education sector?

“Because of the growing population in the country [in Uganda], the government could not support all the schools and schools could not accommodate all the children. In terms of our mission of transforming lives, there was a need for us to come in and support this sector, because there were not a lot of other FIs interested... We found Education Finance was an area that banks could actually support. If we are to achieve our mission of transformation and making lives better, then education was not something we could avoid.” - John Robert Okware, Chief Relationship Officer, Opportunity Bank Uganda

What would enable EdFin to lend even further downmarket to schools offering even lower school fees to families? 

“We can go lower depending on the number of students. If you can grow to scale, then it makes sense and you can repay the loan. However, we don’t want to give loans to make them [schools] overindebted. We can go low provided the demand for the school is quite high... If we can get cheaper long term loans, we can then afford to extend those lower cost loans to our schools.” - Bunmi Lawson, CEO & Managing Director, EdFin Microfinance Bank, Nigeria

What are the main bottlenecks for financial institutions expanding education financing to schools?

“Pricing. The cost of debt financing, given that this is driven by different market conditions. Also, more flexibility and adaptability is required. Financing needs for institutions vary. We need to be fast to meet their needs, or be ready if they require longer term capital.” - Njeri Kirumbi, Deputy Regional Director Africa, Regional Education Finance Fund for Africa, BlueOrchard Finance

OVERVIEW

Even before the pandemic, we knew approximately 258 million children were out of school - which is one in five school-age child globally. And yet, low- and middle-income countries comprise the top 15 countries in the world that spend the most on education as a proportion of their budget. It is clear we need alternative solutions, including non-state actors, to help close the gap in education access. Today, the non-state education market share is over 25% of the total education market. Increased demand for affordable non-state schools means there will be an additional 66 million new seats for children required by 2025 in low- and middle-income countries.

How can we unlock the full potential of affordable non-state schools to add more seats? How can the intersection of financial inclusion and education accelerate needed capital investments? What motivates current private sector actors already investing in education?

Our international panel of experts will share experiences from the local lender, impact investor, and institutional donor perspectives on their motivations for investing in the education sector. Join Financial Inclusion Forum & Opportunity EduFinance, along with moderator James Tooley, for a comprehensive 90-minute session on 25 March at 2:30pm GMT, featuring a brief overview of key findings from Opportunity EduFinance's report on The State of the Affordable Non-State School sector, followed by a discussion with our panel of experts.

PANEL

Njeri Kirumbi, Deputy Regional Director Africa, Regional Education Finance Fund for Africa, BlueOrchard Finance

Andrina Schwartz, Head of the Financial Inclusion Initiative, Credit Suisse

John Robert Okware, Chief Relationship Officer, Opportunity Bank Uganda

Bunmi Lawson, CEO & Managing Director, EdFin Microfinance Bank, Nigeria