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Business Opportunity: Financing Student Computer Labs with School Fees

By Wayan Vota on January 11, 2010

If you ask any parent from Kenya to Ghana, they’ll all agree they want their children to have access to educational information and communication technologies like computers and the Internet. But often they cannot afford a computer themselves, much less Internet access or educational software.

Parent look to primary and secondary schools to provide computer access via shared usage models like computer labs, yet these same schools often cannot afford to upfront costs of buying computers or the ongoing costs of maintenance and support, or Internet access and educational software updates. Or so they think.

Making computers affordable to schools

Computer Lab Financing Solution: School Fees

Each school year, parents pay school fees to educational institutions for each child. These fees support the many extra-curricular activities that broaden young minds. While only a few dollars per year, per student, the school fees add up to a significant revenue source for schools. And a great financing option for capital purchases like a computer lab.

School fees are also a continuous revenue source that can support ongoing expenses like Internet access and computer maintenance and support that is often overlooked in the excitement of an initial computer system purchase. Finally, while parents often complain about school fee expenses in general, few do if they see a direct benefit from an increase – especially giving their children access to ICT.

School Fee Financing: Step By Step

Here’s how schools can finance computer purchases with school fees, with tips for technology vendors:

1. Sell the idea to schools: Schools are a business like any other – they have customers (parents) who pay for a service (educating students). So a technology vendor should target schools using a marketing and sales approach that recognizes this, showcasing how the addition of a computer lab will increase the perception of quality in the school’s service, for which the school can benefit (greater prestige, attendance, funding, etc).

2. Sell the idea to parents: Nothing is going to happen unless parents are excited and buy into the idea. And parents are often driven by the same geek-lust that excites children. Technology vendors can increase sales by showcasing demonstration computers at the school – even lending one out for extended use by key, influential parents.

3. Get the banks involved: School fees come slowly each year, but technology vendors need to be paid quickly, so technology vendors should bring in the local bank that collects school fees (or wants to). Using an accurate computer lab proposal, have the bank develop a financing scheme (often called “factoring receivables”) where it essentially loans the school the money for the computer lab based on future school fees.

4. Build in support payments: While its often overlooked, support payments are usually the most profitable service a technology vendor can offer, and are also the most demanded service by clients. So build support payments into the bank financing scheme – either paid in advance at implementation or annually thereafter.

5. Install quality technology solutions: Children can be very demanding on technology equipment, and yet actual support calls are expensive for a technology vendor to service, so cheap or improperly configured equipment can quickly consume an support payment revenues. Be smart in school deployments – use quality technology solutions, implemented with a clear focus on high reliability and low maintenance.

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Written by
Wayan Vota co-founded ICTworks. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of his employer, any of its entities, or any ICTWorks sponsor.
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3 Comments to “Business Opportunity: Financing Student Computer Labs with School Fees”

  1. Anon says:

    Are you arguing that the schools should charge higher fees to parents? or somehow allocate existing fees to technology?

  2. Wayan Vota says:

    I’m pointing out that you can use school fees as a cash flow for banks to lend against – in essence, factoring a receivable. How you obtain those school fees is up to each school. Schools may find that parents will pay more for a perceived increase in value (exposure to ICT).

  3. Anonymous says:

    i want the schools to have computer labs