There is a continued trend of African students—particularly Nigerians—seeking education from universities abroad, especially in the UK.
For context, more than 43,000 African students studied in the UK in 2022, the highest proportion from Nigeria. Data from 2021 shows that Nigerian students and their dependents contributed an estimated £1.93 billion (~$2.45 billion) to the UK economy.
However, due to Nigeria's continued scarcity of foreign exchange, paying school fees in institutions outside the continent has been challenging. In March 2023, Nigerian banks announced a reduction in the dollars available to customers for personal travel allowance (PTA) and business travel allowance (BTA) on a bi-annual basis. According to the new directive, PTA available to customers will now be slashed by 50% from $4,000 to $2,000, while the BTA will be slashed by 60% from $5,000 to $2,000.
The banks also extended the processing time for accessing foreign exchange (FX) for international school fees processed through Form A from 48 hours to 120 days, marking a significant shift in the FX policy.
Thus, aspiring students have had to deal with the challenge of high conversion rates from the black market, delayed payment of fees due to increased processing time and even trust issues of their FX liquidity & payout partners.
Startups like Endowd Africa, registered in the UK in 2021, have been helping Nigerian students pay their tuition abroad. "We started Endowd to solve a pain I experienced seven years ago as an international student. I was frustrated, from initially deferring my UK university admission because of insufficient funds to requiring an urgent FX conversion from naira," says Mayowa Ayodeji, Founder and CEO of Endowd. "While visiting the UK in 2021, I registered Endowd. The following year, I decided to focus on it full-time, and by April 2023, we released a private beta of our instant tuition payments product, which has now helped nearly 100 students pay their fees seamlessly."
Africa's most-valued payments company, Flutterwave, has joined the fray with Tuition, its latest offering, to allow Africans to pay their fees to educational institutions abroad. The educational institutions available for Tuition include high schools, universities, colleges and some global edutech platforms.
In a statement sent to Bendada.com, Flutterwave CEO says, "We are excited to launch Tuition to support the dreams of African students across all levels who want to study anywhere without worrying about how to meet the deadline for their school fees payment. With Tuition, we are providing a safer, reliable, and affordable means for African students to pursue their dreams and seamlessly get financial support from parents, guardians, and sponsors."
The new Flutterwave service enables students, parents, guardians and sponsors to pay directly to over 40 learning institutions in the UK. The Tuition web app also allows for transaction tracking and history.
Product Manager, Tuition by Flutterwave, Stella Elele, says, "We are always looking for new ways to make payment challenges in Africa hassle-free, and we are confident that Tuition will be a game changer for parents who want to support their children’s education. We are excited to offer this solution to parents in Nigeria, with plans to eventually roll out the service to other African countries. We want to provide the best possible service and support for our customers."
The new product will leverage Flutterwave's payments technology solution to make school fee payments more convenient, secure, and reliable. Parents, guardians, and sponsors can now pay directly to learning institutions in the UK and easily track their transactions by checking the status and history on the Tuition web app.
Tuition is currently available in Nigeria for UK school fee payments and will soon be rolled out to other African countries in the coming months. Flutterwave also plans to add more schools in Africa, the UK, the US, Canada, France and Germany as it grows access to the product.
With an increasing focus on payments for education, we expect that more startups will rise to provide complementary offerings. At the same time, big payment players like Flutterwave will consider building for this vertical and investors will evaluate the space to see whether the 'pay for tuition' market is big enough, growing or can be expanded.
Will investors bet on "reverse remittance" startups the way they bet on the African remittance startups of the years before?