Shul Yako - Inclusive Financing

The issue we are focusing on is the lack of flexibility in upfront school payments for families with school-aged children in Sub-Saharan Africa (SSA). Many families in these communities do not have access to traditional loans due to low or no credit history and strict requirements imposed by financial institutions, which can make it challenging for them to afford the necessary school fees. 

Furthermore, schools in these communities also face challenges as they heavily rely on upfront payments from parents to cover their operational expenses. When families are unable to make these payments, it may result in schools having to send their children home, ultimately hindering access to education for many children.

The scale of this problem is significant, as there are an estimated 30 million children in Sub-Saharan Africa not receiving any form of education. Additionally, households in the region tend to have a larger average size of 6.9 members per household, further complicating the ability to pay for school fees upfront with limited financial resources.

Moreover, the difficulty in accessing traditional loans due to strict requirements and high interest rates only worsens the situation, putting families at risk of financial hardship and perpetuating cycles of poverty and inequality. Without intervention, the growing population of primary and secondary aged children in SSA is projected to reach 1 billion by 2050, which will only increase the pressure on families and schools regarding school fees and operational costs.

Our solution is an innovative financing platform designed to offer families a flexible alternative for their children's school fees. Unlike traditional loans, our platform provides interest-free financing without the need for collateral, guarantors, or a credit score. To assess eligibility for a loan, we consider a parent's history of school fee payments and their children's academic performance. In the future, we aim to use this payment history as a way to establish credit for future borrowing.

Here's an overview of how it works: Through partnerships with schools, we secure discounts on tuition fees ranging from 10-15%. We then directly pay the schools on behalf of approved applicants. Parents repay the loan in monthly installments at the regular school fee rate, without any interest charges.

This approach benefits both families and schools. Families can better manage their finances while ensuring their children's education continues uninterrupted. Schools benefit from improved cash flow and reduced administrative burden, allowing them to focus on delivering quality education.

Currently, we are in the pilot phase to validate the feasibility of our model. Our next steps involve developing technology to streamline loan applications, management, and payment collection. We also plan to collaborate with financial partners to administer the loans, which will enable us to expand rapidly across communities and countries in Africa.

Our solution caters to two primary groups: private schools in Africa and low to middle-class families in the region.

For private schools, our solution addresses the challenges of unpredictable cash flow and administrative overhead associated with collecting payments from parents. By offering upfront payment at a discounted rate and taking on the responsibility of collecting payments from parents, we alleviate these burdens and enable schools to focus more on delivering quality education.

For low to middle-class families, our solution provides much-needed flexibility in paying school fees. With the average household size in Sub-Saharan Africa being 6.9 people, many families have multiple school-aged children, making upfront payments a significant financial burden. Our solution allows them to make payments in manageable installments, reducing financial stress and improving their ability to manage monthly expenses.

Both groups are currently underserved by traditional financial institutions and microloan service providers, which often impose high interest rates, strict requirements for credit and collateral, and other barriers to accessing loans. Our solution fills this gap by providing accessible and flexible financing options tailored to the unique needs of schools and families in Africa.

Our team at Shule Yako is uniquely positioned to deliver this solution. Our Team Lead, Benard, grew up in Uganda and has personally experienced the barriers to education financing that many families face. Additionally Benard's leadership in Uganda for Her, a non-profit he founded dedicated to empowering women and girls through sexual and reproductive health education, economic and social support. Through this experience, he's gained firsthand understanding of barriers to education and economic opportunities, informing Shule Yako's solutions. Benard's commitment to social impact and ability to mobilize resources are assets to Shule Yako's mission.

Our team's diverse expertise in project management, strategy, finance, and software development equips us to address multifaceted challenges in education financing. We prioritize human-centered design principles, ensuring our solutions are guided by the needs and insights of our target audience. Through stakeholder engagement, gathering input, and iterative prototyping, we continuously refine our approach based on community feedback. This ensures that our solutions are not only effective but also culturally relevant and tailored to the specific needs of the communities we serve.

As a result, our solution is not only informed by community input but is also designed to empower and uplift these communities. By partnering with schools and leveraging technology to provide accessible and flexible financing options, we are working hand-in-hand with communities to address their specific needs and challenges. Our team's deep connection to these communities drives our commitment to creating meaningful and sustainable impact in the education sector across Africa.

Our current stage represents a significant milestone in our journey towards providing accessible education financing solutions in Africa. Through our pilot program with Gideon High School in Uganda, we have achieved tangible results and made a real impact on the ground.

Firstly, we have successfully disbursed 29 interest-free loans during Term 1 of the school year, covering the period from February to May 2024. This demonstrates the effectiveness of our model in providing financial support to families who are unable to access traditional loans due to strict requirements and high interest rates. Additionally, the fact that approximately two-thirds of our beneficiaries are women, with an average age of 45, highlights the diverse demographic reach of our solution.

Financially, our pilot program has also shown promising results. We disbursed a total of UGX 13,050,000 ($3,500 USD) to the school after negotiating a 10% discount on the school fees. We anticipate collecting UGX 14,500,000 ($3,850 USD) from parents by early June, indicating a high level of repayment and adherence to our repayment terms.

Furthermore, we are proud to report that we are on track to recover 80% of the disbursed amount by the end of the pilot period. This demonstrates the reliability and trustworthiness of our borrowers, as well as the effectiveness of our loan management system in facilitating timely repayments.

Perhaps most importantly, our pilot program has generated significant interest and enthusiasm among parents from other schools. Through word-of-mouth referrals, parents have expressed curiosity and eagerness to learn more about Shule Yako's offerings. This organic growth in awareness underscores the strong demand for our solution and validates our approach to addressing the challenges of education financing in Africa.

Overall, our pilot program has been a successful venture, providing us with valuable insights, data, and momentum as we continue to scale our operations and expand our reach to serve more families across the continent.

We believe that Solve could provide valuable support in helping us overcome several key barriers as we work to scale our solution. One significant challenge we are currently facing is securing the financial means to expand our pilot program and gain further traction. While our pilot has shown promise in demonstrating the initial viability of our solution, additional resources are needed to accelerate our growth and unlock partnerships with debt financiers. With Solve's network of partners and resources, we believe we can access the necessary funding and investment opportunities to effectively scale our operations.

Moreover, we view Solve's nine month virtual support program as an excellent opportunity to advance our solution. The leadership coaching, networking opportunities, and impact evaluation support would be invaluable for our growth and success. Engaging with experts and like-minded individuals who have navigated similar challenges will provide us with insights, guidance, and support that can significantly expedite our journey to make education more accessible to all. We strongly believe in the power of community and collaboration, and participating in Solve's program would enable us to tap into a global network of changemakers dedicated to driving positive social impact.

Our solution introduces a novel approach by fostering a collaborative ecosystem involving schools, parents, and financial institutions to address the challenge of education financing. This collaborative model is a departure from the traditional, siloed approach and creates a supportive environment where each stakeholder works together towards a common goal of ensuring children receive a quality education.

By demonstrating the effectiveness of this collaborative model, we have the potential to inspire others within Africa and beyond to adopt similar approaches tailored to their unique contexts. This could catalyze broader positive impacts by encouraging the adoption of more inclusive and ethical education financing models across different regions and communities. As more organizations and stakeholders embrace this collaborative approach, it could lead to a significant shift in the market landscape, challenging traditional loan providers and promoting greater financial inclusion and accessibility in education.

Our vision is not just to offer a solution but to spearhead a movement towards more equitable and sustainable education financing practices. We aim to lead by example, advocating for systemic change and empowering communities to take ownership of their educational futures. Through collaboration, innovation, and collective action, we believe we can transform the education financing landscape for the better, ensuring that every child has the opportunity to thrive and succeed.

Our solution is designed to address the challenge of limited access to education financing in Africa, with a specific focus on assisting low-income families. Our theory of change details how we anticipate our solution will make a positive impact on this issue.

• Consistent School Enrollment: Our goal is to provide families with interest-free loans for their children's school fees, which we believe will help reduce disruptions to students' education caused by financial barriers. By promoting consistent school attendance, we aim to enhance students' academic success and potentially increase post-secondary enrollment rates, leading to improved educational outcomes in the communities we serve.

• Improved Academic Performance: With uninterrupted school attendance, children have the opportunity to receive a quality education and develop the necessary skills to excel academically. We expect to see better academic performance among students who benefit from our financing solution, ultimately supporting their growth and progress in their studies

• Enhanced Socioeconomic Opportunities: Education plays a crucial role in creating socioeconomic opportunities. By offering access to education financing, we empower individuals to break free from poverty and access better prospects for themselves and their families. As students complete their education and enter the workforce, they contribute to the economic and social development of their communities, leading to positive outcomes for all.

• Creation of New Credit Opportunities: Our interest-free loans provide parents with an alternative to traditional credit sources, giving them a chance to build a positive credit history and access financing for future endeavors. This financial empowerment enables parents to secure a brighter future for themselves and their families, fostering long-term growth and stability in their communities.

In essence, our Shule Yako solution is aimed at addressing the issue of limited education financing access by promoting consistent school enrollment, enhancing academic performance, creating socioeconomic opportunities, and generating long-term positive impacts in communities. Through our innovative approach, we are committed to empowering individuals and communities to unlock their potential and create a better future for themselves and generations to come.

Our impact goals are centered around two key areas: promoting consistent school enrollment and enhanced academic performance, and expanding socioeconomic opportunities through improved financial inclusion. To track our progress towards these goals, we monitor a variety of specific indicators.

When it comes to school enrollment and academic performance:

"Our objective is to ensure that students in underserved communities maintain consistent school enrollment and experience growth in their academic achievement. We work towards this by offering interest-free loans to cover school fees, in order to remove financial obstacles to education and support uninterrupted schooling, ultimately leading to improved academic success for children."

Enrollment Rates: We assess the percentage of students who continue their enrollment in school from one term to the next, which reflects the effectiveness of our solution in promoting consistent attendance. We collaborate closely with partner schools both before and during our involvement to enhance our ability to measure this indicator accurately.

Academic Performance: We evaluate changes in students' academic performance over time, with the aim of observing enhancements resulting from uninterrupted schooling. We request this information as part of our loan approval process to gain a better understanding of the commitment to academic success. While this is a significant factor, it is not the sole criterion we consider.

In terms of socioeconomic opportunities:

"Our goal is to broaden socioeconomic opportunities by introducing a new credit model that utilizes the payment history of Shule Yako loans. By leveraging this data, we seek to empower individuals with better access to additional financing options, ultimately enhancing financial inclusion and fostering economic advancement within underserved communities."

Loan Repayment Rates: We monitor the percentage of Shule Yako loans that are repaid on time, which reflects the financial responsibility and reliability of borrowers, as well as their ability to obtain and manage credit effectively.

Utilization of Loan Payment History: We measure the extent to which borrowers utilize their payment histories with Shule Yako to access other financing options, demonstrating increased financial inclusion and credit accessibility. This valuable data serves as a new form of credit for individuals who may not have had access to such opportunities before receiving our loans, necessitating a partnership with a financial institution or microloans service provider that aligns with our mission.

At the core of our solution is a robust and user-friendly technology platform that powers our operations. We recognize that technology is a critical component of our solution, enabling us to efficiently manage loan processes, facilitate financial transactions, and drive positive impact in communities across Africa. As we conclude our pilot program, our aim is to gather feedback from our clients and leverage our founding members' technical skillset to design and refine the technology that will fuel our solution. This technology platform encompasses several key features:

• Loan Application and Management System: Our platform includes a secure and intuitive system that allows parents to apply for interest-free loans directly through the platform. It streamlines the application process, collects necessary information, and facilitates efficient loan management.
• Payment Processing: An integrated payment processing system enables parents to make loan repayments conveniently through various channels, such as mobile money, bank transfers, or in-person payments. This feature ensures seamless and hassle-free transactions for our users.
• School Partnership Portal: Partner schools have access to a dedicated portal where they can collaborate with our organization, manage loan disbursements, and provide support to parents. This portal facilitates communication and coordination between schools and our team, enhancing operational efficiency.
• Data Analytics and Reporting: Our platform offers robust data analytics capabilities, providing valuable insights into loan performance, repayment trends, and overall impact. These analytics help us optimize our operations, identify areas for improvement, and make data-driven decisions to maximize our impact.

By focusing on these core features and leveraging feedback from our clients, we aim to continually enhance and refine our technology platform to meet the evolving needs of our users and drive meaningful change in education financing across Africa.

Our solution team comprises three dedicated members: Benard Serunyigo, Shubham Goyal, and David Ton-Lai. Each member brings unique expertise and experience to the table, allowing us to approach challenges with a well-rounded perspective and ensure the success of our mission. Benard, brings firsthand experience and insights from his upbringing in Uganda and work with schools and parents through Uganda For Her. Shubham Goyal contributes technical prowess honed at Amazon, ensuring our platform's robustness. David Ton-Lai brings project management skills and emphasizes user-centric design. Together, our diverse backgrounds converge with a shared vision for accessible education. 

Our team fully formed in April of 2023 with an initial concept of a platform for managing payments for school fees. However in September of that same year, our focus shifted towards providing greater accessibility to education for all. This evolution reflects our commitment to addressing the fundamental challenges faced by families in accessing quality education, driving us to refine and adapt our approach to better serve our mission.

As a team of three co-founders, we have yet to bring on new team members at this time. However, each of the co-founders identifies as a member of a visible minority and understands the importance of diversity, equity, and inclusiveness. This is evidenced in how we operate democratically as a team for problem-solving and key decision-making as we continue to work on our solution. Each team member's perspective and input are valued equally, fostering an inclusive environment where diverse viewpoints are encouraged and respected. With respect to MIT Solve's commitment to these three core values, we will evaluate our company policies to ensure there is alignment as we progress.

Our business model is focused on providing accessible and interest-free loans for school fees to families in underserved communities, primarily in Africa. Our target customers are low to middle-income families who find it challenging to afford upfront payments for their children's education. We offer them financial assistance in the form of interest-free loans, allowing for flexible payments towards school fees without the burden of high-interest rates or collateral requirements.

Through a partnership model with private schools, we negotiate discounted rates for school fees and directly disburse loans to the schools on behalf of parents. This enables parents to repay the loans in monthly installments, helping them manage expenses more effectively and ensuring consistent enrollment for their children.

Our initiative not only provides immediate financial relief to families but also has a broader impact on education accessibility and socioeconomic empowerment. By removing financial barriers to education, we ensure consistent school enrollment and enhance academic performance among students in underserved communities. This, in turn, can lead to increased socioeconomic opportunities for these individuals in the long term.

Our customers seek out our services because traditional loan options are often inaccessible due to strict requirements and high-interest rates. By offering interest-free loans with flexible repayment terms, we address their immediate financial needs while empowering them to prioritize their children's education without compromising their financial stability.

We aspire to partner with a debt financer that aligns with our vision of financial inclusivity and educational accessibility. This collaboration would utilize the technology platform we are building to efficiently manage loans and scale our operations across multiple regions, serving even more families in need. Ultimately, our goal is to establish a sustainable model that benefits our customers and instigates positive change in the educational financing landscape.

Our plan for financial sustainability revolves around multiple revenue streams that support our work in providing accessible education financing. Currently, we earn revenue from our interest-free loans by collecting the difference between the discounts provided by partner schools. We aim for a repayment rate of 80% during our pilot phase and continuously refine our processes to improve this metric.We are confident that we can work towards improving the repayment rate as there is evidence from organizations like Opportunity International that suggests microloan repayments can be very successful.

Furthermore, our team has a track record of securing funding through grants and investors, leveraging our combined experience and networks. For instance, Benard's non-profit, Uganda For Her, has successfully secured nearly $2 million USD in grants and donations to support its initiatives. 

As a tech-driven company, we aim to develop the technology infrastructure necessary for facilitating and managing these loans efficiently. By demonstrating our traction and impact through data collected during our pilot phase, we intend to attract a debt finance partner who shares our vision. This partner will provide the necessary capital to scale our operations, with Shule Yako earning revenue by facilitating loan opportunities. This model ensures both financial sustainability and scalability while staying true to our mission of making education more accessible to all.