50K students to be profitable: The business model of this online university

UNICAF has also set up its own university in Malawi.

In 2015, disruptive student protests erupted in South Africa when tertiary education institutions proposed fee hikes of between 10% and 12%. Protestors, under the banner ‘Fees Must Fall’, managed to shut down many of the country’s major universities, and government eventually agreed to a 0% fee increase. But last year a proposed increase of up to 8% reignited protests – this time much more violent, with students calling for free higher education for all. Their reasons: the current costs are only affordable for the wealthy (and mostly white) few and were therefore making it near impossible for those born economically disadvantaged to ever move up the income ladder.

Access to higher education is also a challenge in various other African countries, which is why Cyprus-based Nicos Nicolaou started UNICAF, an online platform offering Africans affordable, quality higher education.

“The number of [high school] graduates is increasing at a very fast pace. They estimate that by the year 2030 it will increase by 42% in sub-Saharan Africa, but the rate of enrolment in higher education is only 9%. So there is an urgency to address the capacity issues in higher education on the continent,” Nicolaou told How we made it in Africa.

Founded in 2012, UNICAF has partnered with a number of prominent universities (such as the University of South Wales and Marymount California University) to offer their courses and degrees online. While the criteria to be enrolled in these programmes remain the same, their online nature allows them to be offered at a fraction of their usual cost. For example, a degree gained through physically attending the University of South Wales might cost £12,000 (US$15,000). But via UNICAF that same degree will cost less than £3,000 (under $3,800).

However, the institution receives between 100,000 and 150,000 application enquires every month and Nicolaou noted that a large portion of qualified Africans still cannot afford these reduced fees. UNICAF therefore offers different levels of scholarship (partial and full) as well as various payment-plan options to suit a student’s financial circumstances. Already $35m has been awarded for scholarships.

Currently, UNICAF has over 8,000 students enrolled, but is not yet profitable. Nicolaou calculates that once the platform reaches 50,000 enrolled students (expected by 2020) it will have reached economies of scale and can start making profit.

“If you look at just Nigeria, it has 1.7 million [high school] graduates every year, but there are only half a million available places in universities. So 1.2 million qualified students cannot get into a university, and UNICAF is only talking about reaching 50,000 in [three] years. So this is actually a very pessimistic number.”

Modern-day education

Nicolaou believes that an online learning experience can be even more effective than the traditional model of physically attending universities. For example, students are able to replay lectures as many times as they want (and at a time that best suits them) while interactive material can support learning and even allow students to ask questions like they would in a lecture hall.

“So we believe the learning experience for students is even better than on the ground.”

In addition, UNICAF has also set up its own university in Malawi, and is establishing learning centres throughout the continent to allow face-to-face support and sessions, as well as access to student services such as internet and computer labs. To do this, it has received backing from investors, including the UK’s development finance institution, the CDC. It has already set up facilities in Nigeria, Zambia, Kenya, Ghana, Mauritius and Uganda.

According to Nicolaou, UNICAF’s blended learning approach offers a solution to the shortage of quality universities on the continent.

“If you look at the problems faced in sub-Saharan Africa in terms of higher education, the local governments will have to build 10 universities every week for the next 10 years in order to reach [the required] capacity. But if you speak to many of the governments, they don’t even have plans for one. So for many students, the only way they can get a recognised degree is through us.”