It would be hard to even find a school at the same price point to which to compare our classroom. We are 40% cheaper than the median cost of other low-cost private schools. And in 2013, all of our teachers will have the entire curriculum on an e-reader which they will use for attendance, assessments, and lessons. This will allow real-time publishing in response to pupil performance, integrated to attendance, so the published lesson can actually guide the teacher to ask children questions by name, that are appropriate for that child’s learning level. We can do this because we have always planned to provide the best education, a world-class education, to poor children at scale. A sole proprietorship couldn’t do this. Even a small chain couldn’t do this. Only a company as audacious (and not averse to risk) as BIA could do this. You have to bet on the long-term, and on hundreds of thousands of pupils. You have to bet that you can actually create a better education system, which parents will recognise as a service they and their children need. But if you do, then there are some two billion families who need this service: basic education that a family living on $2 a day or less can afford.
While each of our academies becomes profitable by the end of the first year, as a company we do not become profitable until 2015, when we will be educating 500,000 pupils. Many people wouldn’t be willing to play the long game, be willing to take on this much risk: to work incredibly hard for years, developing a company that will only self-finance six or seven years later.
Tuition is paid by mobile money transfers, can you tell us about this strategy?
Bridge International Academies was one of the first corporate users of M-Pesa. We started using M-Pesa in 2009, when we only had one academy. At the time, it would have been easier, and likely cost less than the software development, to just have one of the team walk to the academy – it was only a 30 minute walk from our support centre. But easy isn’t always the right thing for long-term planning. We invested in having a robust, auditable, and secure financial system from when we only had 60 pupils so that once we had 26,000 (which we do today), that they systems we built in 2009 would have laid the groundwork for a long-term future. In the long run, having to move physical money between thousands of locations is far more expensive, and prone to error, loss and embezzlement, than developing sophisticated software.
Not having money at the academies also solves for two other problems that endemic either in our industry or environment. First, a core problem facing parents taking their children to both public and private schools in Kenya, and many other countries across Africa, is that while one fee is posted, teachers or principals may ask for additional money, listing various additional fees. Some teachers even bluntly call the money they are asking for a “motivation fee” and say they aren’t going to teach the child without this direct payment to their pocket. At BIA the one-time admissions fee, termly exams and materials fee, and the regular monthly fee are all posted. There are published on posters spread throughout the community. And, the parent knows that we only accept payment through M-Pesa, or deposit at Equity Bank. We publicly post that a parent should never pay a teacher or the manager of the academy. This way we ensure that we are guaranteeing that our low fee is actually what the parents are charged – or else they can call the parent hotline. Using mobile money and having a cashless business also means that our academies are not targets for robbery, and our academy manager is not a target either. Holding or moving any money, let alone a month’s worth of academy fees needed to pay vendors, and teachers, makes you a target. By both collecting revenue and paying salaries and vendors through mobile money, there is nothing to steal, and no one to rob at the academy.
Any plans to open primary schools outside of Kenya?
We are actively planning for international expansion. While we are a Kenyan company, we had planned from our first day to eventually be continental, and then global. Again, to keep our fees low, we must operate at a massive scale. Now that we’ve proven the model in Kenya, and project that we will be serving 100,000 pupils here by the end of 2013, we are setting our sights on both expanding within East Africa, and opening new regions. Nothing is definite yet, but we are looking most seriously at Uganda, Nigeria, and India for expansion in 2013 and 2014.