Elementary education was the educational sector that suffered the most immediate consequences of the economic crisis resulting from the coronavirus pandemic. The focus of educational administrators on finding new strategies to overcome the challenges posed by this period has drawn the attention of economic experts, who emphasize the importance of more effective financial planning and oversight in school administration.

Two of them gave those in attendance a real lesson during the first lecture of the Managers’ Forum on the second day ofBett Brasil2022. Danilo Costa, founder ofEducbank—the first financial platform dedicated to Brazilian schools— and Fernando Barão, co-founder ofCorus Consultores, spoke on “The Financial Health of Educational Institutions” to a packed auditorium of attentive administrators and principals concerned with overcoming persistent problems such as delinquency and school dropout rates, which have contributed to the closure of many schools in the post-pandemic era.

Barão spoke about the opportunities created, for example, by the growing trend of school acquisitions. “Many schools have slowed down, and many funds have seen an opportunity to buy at lower prices. But this is a long-standing trend, accelerated by the current situation. The big difference is that the school can remain family-owned, but its management needs to become more professional.” The expert also pointed out that there is no “one-size-fits-all” formula for implementing sound school financial management. However, he confirmed that there is one common thread: meticulous attention to payroll is the key factor in the sector’s success. Combined with this is the adoption of strict criteria for granting discounts.

Danilo Costa, meanwhile, explained how the fintech company Educbank operates, which eliminates the school’s delinquency problem. “We’ve built a definitive solution to delinquency. We take on the responsibility and eliminate the school’s delinquency. At the beginning of the month, we deposit 100% of the full tuition amount, as if 100% of the families were paying on time. As a result, the school no longer has delinquent accounts and no longer needs to collect payments. That is our risk; families don’t even know that Educbank exists, because we are a financial backer of the institution,” he explained.

According to Costa, in order to assume this risk, Educbank analyzes the school’s academic performance, its relationship with parents, teacher turnover, and the social and institutional performance of the schools it selects for financial support. “The higher the quality a school provides, the better its rating at Educbank. In other words, the higher the school’s quality, the greater its access to capital through Educbank,” explained the expert, emphasizing that the Brazilian banking system was not designed to serve the basic education sector. “That’s why niche fintech companies have emerged to take up this cause.”

In addition to financial support, Educbank offers more comprehensive support to schools, which Danilo Costa refers to as a “support ecosystem for school operators.” Educbank provides accounting and marketing services, and starting in June, it will launch solar energy financing projects for schools. “This is first-hand information here for the Forum. We’re already seeing incredible demand. And in the second half of the year, we’ll launch a real estate fund for school operators interested in selling their property but continuing as tenants of the school. It’s a major source of liquidity, estimated at around R$ 1 trillion,” announced the founder of Educbank.