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As Commercial Banks Take Over Educational Banking In Nigeria



Those who perceives Nigeria as a failed state may not be total correct but it’s also difficult to fault such views when one considers the value our leaders place on the provision of formal learning structure for citizens.

In a country where over 10 million children are said to be out of school, everyone appear to be seeing only the commercial value of education to the detriment of its societal advancement.

As some will say, Nigerians are not bereaved of beautiful ideals, the problem is their implementation. The educational sector is not exempted of this challenge.

For instance, over 26 years ago, the federal government signed into law decree No. 50 of 1993, establishing the Nigerian Education Bank.

The concept was modeled in the United Kingdom and the United States of America whose focus is to provide loans to student. That way children are encouraged to pursue their educational dreams without fears of financial constraints.

Research shows that the failed the Nigerian Education Bank was designed to focus on three key aspects, namely, To serve as a major intermediary in Nigeria’s education credit market; To harness private sector resources for the funding of education; and To takeover of part of the educational funding responsibilities.

The ideal then was to free the government from the sole responsibility of providing the all necessary education to citizen as well as free resources for use in other pressing sector of the economy.

Accordingly, the main and specific functions of the Bank include, among others: student lending, lending for publishing, equipment leasing, project financing, funds mobilization and provision of advisory services for educational purposes. Some prescriptions are incorporated to fine-tune the operational modalities.


Tapping the Opportunities

Having perceived the huge opportunities in education financing Nigerian commercial banks are positioning to do what the government conceptualised but failed to implement. The reason is because they, the banks can see the money in the sector. The bank’s entry into the sector comes in various forms while some are focus on the supporting infrastructure others encourage parental savings their wards education in foreign institutions.


The First Bank Educational Fund

Recently, First Bank of Nigeria Limited, announced a new educational package tagged, ‘FirstEdu.’ The product is said to be specifically designed to enhance the provision of educational facilities in schools. The package includes FirstEdu loan and FirstEdu portal.

FirstEdu loan is targeted at private Nursery & Primary and Secondary schools. It is aimed at assisting the schools in achieving their desired growth in the medium and long-term. The product provides funding to replace old furniture and equipment, pay staff salaries, purchase brand new or fairly-used buses as well as refurbish dilapidated buildings and classroom blocks.

As the Bank rightly puts it, the product avails school owners/proprietors the opportunity to stay ahead of competition at all times. More so as Bank claims that the product allows school proprietors access to facility with no tangible collateral, apart from domiciliation of school fees account with it.

On the other hand, the FirstEdu portal is said to be a modular and robust web-based enterprise portal that enables Tertiary educational institutions manage academic, administrative, professional, logistics and payment challenges.

According to the Bank, the portal is designed to take the stress of logistics, administrative and payment challenges off the institutions, and allow them to focus on meeting their year-long, medium and long-term objectives.

The product features and benefits include; e-Learning, virtual library and facilitation of exchange programmes with foreign educational institutions; academic & student events/time-table/calendar management; school fees payment via the internet; online information and result checking; interactive community forum between students and teachers. It also affords applicants the opportunity of enrolling from the comfort of their homes or any location around the world; no licensing, installation and maintenance cost and plugs avenues for revenue leakages amongst others.

According to Chuma Ezirim, group executive, e-Business & Retail Products, First Bank of Nigeria Limited, “with FirstEdu, private schools across the various tiers of education in Nigeria; elementary, secondary and tertiary, have the right tool to boost their business to the level they desire. With over N5 billion loans already disbursed to schools this year alone, we are committed to supporting growth in this key sector of our economy.”


FSMB’s Educational Savings Plan

Unlike First Bank, the management of First City Monument Bank (FCMB) has its eyes on helping parents save for their children and wards educational pursuit. One of such products in the basket is the Education Investment Plan.

The plan according to the Bank is a convenient and secure way to save for a child’s university education in the USA, UK, South Africa, Ghana and Nigeria.

The product is said to provides both educational and actuarial advice, and aims to help parents and guardians build up a lump sum by investing periodically (monthly/quarterly/yearly) into an investment fund the bank will pay out when the plan ends.

Features of the product includes, education advice, which is restricted to universities in the USA, UK, South Africa, Ghana and Nigeria; Projected benchmark return at prevailing MPR (Monetary Policy Rate); Parents control assets until child reaches legal age; Can be operated for an unborn child

Online account access which enables investors to check their balance, review contribution history and investment performance online; Total amount contributed is guaranteed if investment is held for more than a year; and Investors are free to designate a different beneficiary at any time.

However, there is caveat which say, Funds are not frozen upon unlikely event of the demise of the investor if they take up a life insurance cover. By implication an insurance cover is a necessary requirement.

In summary, it’s obvious now that the failure of the manifestation of the Nigerian Education Bank after 26 years the decree establishing its operations was signed into law, the commercial banks are feasting on the loophole to make money at the detriment of the poor citizens.

Nice as this services are, the poor and downtrodden in the society who need education urgently to improve their self worth and value are shut out as they are offered the elites. Therefore the need to resuscitate the abandoned Nigerian Education Bank cannot be over emphasised. And the right time to do that is now.



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