Segmentico Limited, an innovative financial company, has broken new ground in its quest to increase access to funding for low-fee private schools at a time when the number of Nigeria’s out-of-school children is growing but government’s ability to intervene is waning.
Low-fee private schools are filling the gap and providing formal education to children and wards of low income earning Nigerians, in a country where over 70 million people live below the poverty threshold of $1.90 a day (N685.43).
Since most of the low-fee schools are run by private individuals, most banks will not lend to this sector. There are between 18,000-25,000 private schools in Lagos alone, all of which have created assets- land and buildings. As they expand, these schools need money to put up additional classrooms or a laboratory or some other facilities. Most of them borrow from private money lenders, paying up to 60 per cent interest a year. This slows down improvement and expansion at these schools.
Segmentico has 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 it to extend its successful model to more than 5,000 schools throughout the country over the next five years.
“We have disbursed over N10 million worth of loans and the repayment rate has been impressive 100 percent.” Wale Odeja, founder, Segmentico Limited said. “But we have limited funds to provide loans to all applicants and the maximum loan amount is too small for some applicants.”
The company has embarked on a journey of transforming into a leading, customer-centric, diversified lending company; it plans to continue building on its leadership position in the education finance space with an objective of positively transforming the education lending space in Nigeria. The core loan offering enables low-fee private schools to improve the quality of education and increase the capacity to educate more children from low-income households.
The company has 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 Segmentico delivers growth which is sustainable with robust asset quality.
“Our school’s partnership with Segmentico has enabled us to reach out to more children with all the opportunities that a good education can provide,” Abioye Funmilola, the Head, Rosemanuel Educational Services said.
Segmentico’s model is working because people have little faith in public 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.
The company was founded in March 2019 and is determined to focus on continuous innovation in products and services to remain relevant to changing customer needs, leveraging technology to deliver better customer experience.