For thousands of entrepreneurs in the education sector owning schools, one of the biggest challenges is cashflow, just as it is in the public schools that the government under-funds. In this interview at the SME Digest radio show on Inspiration 92.3 FM, Mr Nnamdi Nnani, Product Manager at Access Bank Emerging Business Unit, explains some ways the bank has intervened to create some solutions.
Excerpts What challenges does the education sector in Nigeria face? Education, especially formal education is the single most important and foundational element in the developmental process of any individual in the society. As important as this is, you will agree with me that as a nation Nigeria is not doing as much as we ought to in the education sector.
The just approved national budget, you have just about 7% of the total budget sum of N10 trillion for education sector. This is below what UNESCO recommended for any serious society which is about 15% to 20%. Not only that, if you look at the 7.01% that was earmarked for education and compare it to what it was last year, you will see that there is a slight decline. So it is very clear that the desired attention is not given to education.
What is Access Bank doing in the sector especially at the backdrop of this challenge? Access Bank can only do as much as it can. We’ve done our research together with some independent aggregators, and we were able to identify some problems that public and private educational institutions have. One of such challenges is the lack of character development content in school curriculum. This is in addition to the problems being faced by many schools that need funding to pay salaries, renovation and stock text books year in year out.
We at Access Bank want to do more; we realise that the character development content deficiency is more prevalent in public schools. We are in collaboration with some independent aggregators like, Inspire Excellent Initiative. So, we will be distributing text books for free to a lot of public schools starting with Lagos. The content of the text books will be on character development.
Are the books only meant for children of Access Bank customers? You don’t have to be an Access Bank customer for your children to be able to access the book. If you closely analyse it, it is more like our Corporate Social Responsibility, CSR, initiative. It is our way of giving back to the society that has helped us thrive. We are actually the biggest bank in Nigeria and this is one of our ways of thanking Nigerians for giving us the economic opportunity.
The books will be absolutely free. What do you have for private schools? For private schools, we have what we call a Diamond School Account (DSA) that allows any school open an account with Access Bank and the termly (a period of 3 months) charge for that account will be N6,000 regardless of the volumes the school turns in because of school fees. We also avail them short term school loans for working capital for school owners to pay salaries to their staff and also carry out some services maybe, infrastructure renovation.
In the month of June, we have an education fair where we will bring most of the stakeholders in the educational sector to exchange ideas on how to run the sector better. Can a school owner access the loan with a personal account? The school has to be registered. Every business is a legal person. The owner of the school is separate from the person of the school. If you want to access personal loan, we have a product for that, but if you want to access a loan for your school, the school must be registered with the Corporate Affairs Commission, CAC, and the ministry of education. After which you open an account and run it for, at least, a period of three to six months and then you can apply for a loan.
Must a school have a collateral to access your loan? You must not have collateral to access our loans, but the maximum amount you can access without collateral is N50 million. The challenge is not so much the unavailability of funds, but the lack of awareness of its availability. The moment you step into any Access Bank branch your problem ceases to be knowledge, because every detail you require will be availed to you. Even if the challenge is that you can’t meet the requirement, we won’t let you continue that way. We act graciously by not only funding the qualified, but we also qualify the unqualified after we have taken you through our business clinics and we can see that the school is now properly structured.