Jamaican firm gets cash from US billionaire, contract in Ghana
Avia Collinder, Business Writer
A small Jamaican firm that has made a name for itself providing technology-based solutions for some financial administration problems that plague schools has secured a United States government contract and an undisclosed amount of capital from American billionaire George Soros to transfer its expertise to a problem-plagued school-lunch programme in the West African nation of Ghana. The programme is said to be costing the government there US$250 million a year to administer.
Student Card Limited (SCL) was among 14 firms that each received between US$50,000 and US$100,000 in January as seed funding from the United States Agency for International Development for various projects under what is known as the African Diaspora Market programme.
The development agency has also placed SCL in the hands of renowned American financier Soros, whose venture-capital outfit will provide additional equity funding to the fledgling outfit. Richard Houlihan, who runs a leading company valuation and financial advisory firm with offices throughout the US, is also named in the deal.
While it has not been ascertained which investment vehicle Soros is using to help capitalise SCL, it is expected that the financier will take up to a 20 per cent stake in the enterprise.
The firm is a local provider of technology to educational institutions in Jamaica. Its products and services include an electronic student lunch card, which provides greater accountability and easier administration for such feeding programmes.
Jamaicans Khary Robinson, Lennox Robinson, Bobby Chin and Peter Chin are the directors of the company.
According to Khary Robinson, the chief executive officer, through its technology-based systems, SCL will save the Ghanaian government up to US$130 million a year on the lunch programme, which is plagued by accountability issues affecting the existing paper-based voucher system.
Innovative business idea
Now seven years old, SCLwas one of 10 companies chosen from a field of 733 in January to enhance development in African nations through innovative business ideas.
"The Ghanaian government currently spends US$250 million on feeding 500,000 students each day, a process that should cost them US$120 million. Therefore, SCL could save Ghana as much as US$130 million annually," said Robinson.
"There are six million students in Ghana who spend an average of US$3 a day on meals and spend US$21 to US$30 a year to pay for school fees. SCL will aim to address as much of this market as applicable in the first 12 months, with a focus on private schools and the government school-feeding programme."
With the new electronic system, the government of Ghana also hopes to improve attendance by female students, which is said to have already climbed to 21 per cent since the start of the lunch programme for students in the country of 25 million people.
Testing of the system will begin in Ghanaian schools next month, and full card distribution is expected to begin in September this year.
The company is currently negotiating partnerships for the Ghana operation, key among them being securing a telecommunications partner, top-up partners, and a banking partner. The directors say the main investment of US$2.5 million has already been made in the development of the software.
"What remains to be put in place for Ghana are the cards and terminals," Khary Robinson said.
In Jamaica, SCL has gained significant traction with private schools and now boasts some 60,000 users from mainly these institutions. The firm also collects more than $1 billion in school fees each year for over 30 schools.
Robinson notes that the student card which comes with photo ID has no limit to the amount of money that can be put on, but there are daily spending limits. Parents determine daily spending limits and also request location limits, which controls where the card can be used.
There is a $10 transaction fee for use in Jamaica. Users can recharge the card online, at Bill Express or at any JN Money Shop.
"We are seeing approximately 20 per cent of the campus population in schools using the card on any given day," the company CEO informed.
"We aim to increase utilisation to 65 per cent in all schools by the end of 2010 through a series of education and promotional initiatives."
For its planned Caribbean roll-out, which is said to be under consideration, the service "may be franchise-based, given our intention to spend the time to cement ourselves in the Jamaican and African markets," Robinson said.
The company is also targeting other public institutions to apply the technology platform to solving many other administrative issues, including those affecting public-library management, welfare-service reconciliation, public-transport passes, grade reporting, student-development tracking, attendance management and