By Ope Adeoye
Back-to-school is supposed to be a cheerful rhythm—fresh uniforms, packed lunch boxes, morning assemblies. Yet behind the smiles sits a quieter reality: many school owners are entering a new half-term still carrying last term’s fees. That cash-flow gap slows everything else—payroll, supplies, minor repairs, even the fuel that powers school vans. In practical terms, it’s an SME problem: private schools are small businesses, and small businesses are the spine of our economy. MSMEs account for 96.9% of businesses, 87.9% of employment and 46.32% of GDP in Nigeria, according to the NBS/SMEDAN 2021 survey highlighted in PwC’s MSME report.
Parents are struggling too. The last academic year brought broad cost pressures—from transport to supplies—and multiple outlets reported families under strain as fees rose with operating costs. In response, many proprietors say they’ve gone “softer” to retain pupils, allowing instalments, deferrals and long grace periods. That keeps classrooms full but leaves cash thin. BusinessDay’s reporting captured this carrot approach as a survival tactic, not a strategy. Businessday NG
The macro context matters. Nigeria’s digital payments rails are stronger than ever. In 2023, e-payment values hit roughly ₦600 trillion, up 55% year-on-year, and NIBSS Instant Payments (NIP) transaction value reached about ₦476.89 trillion in H1 2024, up 39% from H2 2023, evidence that Nigerians already trust electronic channels for everyday value exchange. At the merchant layer, acceptance has broadened; a 2024 study commissioned by Visa suggests about 60% of Nigerian retailers now accept digital payments (40% remain cash-only), underlining an economy steadily rewiring itself.
Yet one class of payment still behaves like yesterday: recurring, obligation-style payments, with the school fees paid term after term. Transfers and manual reminders require parents to remember and repeat; if cash is tight in a given week, the “I go pay next week” loop begins. Schools, meanwhile, carry administrative cost and emotional labour: staff time spent compiling ledgers, sending WhatsApp nudges and reconciling bank alerts.
Nigeria already has the plumbing to make recurring payments behave differently. NIBSS Direct Debit (and its Central Mandate Management System) lets a payer grant consent once for a defined amount and schedule; debits then occur on the agreed dates, under bank-grade rules overseen by the Central Bank and NIBSS. The CBN’s guideline on the direct-debit scheme dates back over a decade; it’s not new, it’s simply under-used in many consumer contexts.
What would it look like if more private schools moved fee collection from “chase” to “consent”? In plain terms:
- Parents approve once, in advance. On each due date, the agreed amount moves automatically.
- Schools regain predictability. Cash-in matches lesson plans and payroll cycles.
- Fewer reminders, fewer awkward conversations. Administration shrinks; relationships improve.
This isn’t theoretical. Across sectors, from utilities to loan repayments, direct debit is the quiet engine that keeps revenue regular. Even NIP commentary from ecosystem players notes the availability of NIP-enabled direct debit for scheduled collections.
Of course, adoption must be sensitive to parents’ realities. Instalments still matter; transparency and easy cancellation matter; and consent is non-negotiable. But the outcome is worth the design work: a school that can plan. A teacher who can rely on payday. A bursar who spends more time budgeting than begging.
At OnePipe, we’ve spent years building connective tissue between businesses and Nigeria’s financial infrastructure. Recently we introduced PaywithAccount, a tool that helps schools (and other SMEs) formalise those consents and collect fees automatically via Nigeria’s direct-debit rails, with clear mandates and reminders built in. It’s not about making parents pay “more”; it’s about making agreed payments happen on time, with their permission, and with less friction. By anchoring collections to the same trusted network that already powers most bank-to-bank transfers, we reduce reconciliation work and the emotional toll of repeated chasing.
Why highlight this now? Because the cash-flow pinch is timely and solvable. Proprietors tell us the mid-term resumption is when arrears and promises pile up. Meanwhile, the national conversation keeps surfacing the ethics and impact of sending children home over unpaid fees. Whatever your seat in that debate, everyone agrees: stability helps schools serve better. Recent stories have shown how fee defaults cascade into salary delays and cutbacks, eroding quality.
The task ahead requires not just product adoption, there’s also a need for behavioural change. Communications should be parent-friendly: plain language, instalment options, reminders before each debit, and a transparent pause/stop process. Schools should start with a pilot cohort (e.g., returning families who request instalments), track results for one term and then scale. And the ecosystem should continue to improve: better bank-level mandate UX, faster dispute resolution and clearer guidance for proprietors.
Nigeria already proved it can leap in payments, our e-payment surge is not a fluke; it’s the compounding result of rails, regulation and user habit. Bringing school fees into that rhythm is the next practical step. For private education to keep teaching while costs rise, predictable cash-in is oxygen. When revenue is regular, schools can plan. When schools can plan, students thrive.
That should be the goal of every stakeholder this term.