Private school owners have embarked on negotiating for new low loan schemes, which can enable them to recover from the effects of COVID-19. 

A number of private schools continue to face the resultant effects of Covid-19 as some proprietors sell off their schools following pressure from unserviced loans and utilities. 

Dr. Sarah Nkonge Muwonge, the proprietor of five schools which are spread out in Kampala, Jinja, Masaka, and Buloba, says that as proprietors, they need to think outside the box because the government has not extended any help to private schools. 

“The private schools have no funds to sustain schools during holidays, if this can support us, it is unique, if they have decided to partner with us to develop schools, it is an added advantage. We need something to stabilize our schools,” she stated. 

Speaking after the launch of a school loan product for private schools by Entrepreneurs Financial Center (EFC) at Kolping Hotel on Friday, Dr. Nkonge noted with concern that private schools suffer a lot with working capital during holidays and called upon government to look into supporting private institutions like schools and revise the 5-year license issue. 

Fred Talemwa, the proprietor of Good Choice Schools, argued that schools face distinguished challenges which can’t be addressed by the current loan regime. 

“Schools have so many needs which are not looked into by the current loan regime. We propose a law on interest rates to be moved to annual or per annum,” he proposed. 

Michael Sekyondwa, the Executive Director of EFC, explained that the product is focused on offering credit and advice to private school proprietors in support of defined school activities to improve the overall learning environment at a low-interest rate of 4% per month. 

“We got partners and made a survey to find out about the private schools’ unique needs and we developed unique schemes to solve problem per problem. Some schools have no resources to cater for school needs,” he said. 

Sekyondwa added that many bank loans are not structured to solve the current needs of the private schools and the interest rate is intimidating. 

“This product serves the different people to pay much as low as according to the cash flow. We want to meet the actual need, if it is buying a school van, we buy the van and the school pays back accordingly,” he added. 

In January 2021, proprietors of private schools appealed to President Yoweri Kaguta Museveni for assistance, arguing that their schools are at risk of being auctioned due to accumulated bank loans. 

The proprietors asked government to create a relief fund of at least Sh500b to enable them smoothly prepare for school reopening and recover from the adverse effects of COVID-19. 

Media reports indicate that schools have already presented a Sh2.5 trillion bailout request to President Museveni that is yet to be considered.  

According to data from the Bank of Uganda, as of March 2021, a significant chunk of non-performing loans in the construction and real estate, which stood at 57.4%, resulted from non-payment of educational institutions loans. 

In August 2021, the Finance Minister Matia Kasaija advised distressed proprietors in educational institutions to sell off some of their properties to clear debt obligations. Many of these loans have since accumulated.