15 October 2019

Sector Focus: Education

Education as a pillar of growth in government plans creates opportunities

Contact us

Request a callback

Every customer enquiry is important to us. By providing details about your business interests we can direct your enquiry to our most relevant team member.

Please don’t enter confidential information such as your bank account details here.
All fields are mandatory unless otherwise indicated as optional.

  1. Current: Step 1 of 2 01
  2. 02 Step 02

Reason for contacting us

Enter a topic
Enter a topic

Contact details

Please enter your name
Please enter your telephone number

When may we call you?

Preferred time of day

We will call you within the next 3 business days

Back

Request a call-back - Your business interests (optional)

Every customer enquiry is important to us. By providing details about your business interests we can direct your enquiry to our most relevant team member.

Please don’t enter confidential information such as your bank account details here.
All fields are mandatory unless otherwise indicated as optional.

  1. 01 Completed Step 01
  2. 02 Current Step 02

Business size (optional)

Your business turnover

Your industry sector (optional)

Your market interest (optional)

Which international markets interest you?

Add your business interests

Please don’t enter confidential information such as your bank account details here.
All fields are mandatory unless otherwise indicated as optional.

Business size

Your business turnover

Your industry sector

Your market interest

Which international markets interest you?

Request a callback

  • Sorry

We’ve encountered a problem

We couldn’t send your message. Please try again, return later or call us on

Request a callback

  • Thank you

We’ll be in touch

A Relationship Manager from HSBC Oman will give you a call within three business days.

Your interests

  • Business name:
  • Turnover:
  • Sector:
  • Location:
  • International markets:

Add your business interests

We won’t sell your data or misuse it. Read how we handle your details in our cookie policy.

Education is crucial to the development of nations. It fosters innovation and creativity, which are essential to thrive in an ever-evolving environment. As Gemma Wild, HSBC’s Regional Sector Head, Education, CMB, MENAT, explains, the sector’s importance in the region has been recognised by governments, which has led to greater international interest from investors as well as education providers.

Education as a route to socio-economic growth

Globally, the education sector is recognising the need to pivot in response to technological innovation and industry’s changing skill requirements. In the Middle East, North Africa and Turkey (MENAT) region, the education sector remains a top priority for governments, many of which are transitioning towards sustainable and knowledge-based economies.

National budgetary allocations for education continue to strengthen the sector even as rising population, high per capita income and an increased preference for private education causes fundamental changes in the dissemination of learning.

The MENAT region has an increasing population base of school- and college-age students. The Gulf Cooperation Council (GCC) nations alone are expected to see a total student population of 14.5 million in 2022, registering a CAGR of 2.3% from an estimated 12.9 million in 20171. In the UAE, the 2019 federal budget of AED 60.3 billion allocates 17% for education development2.

In Egypt in 2016/17, the total enrolment at the K-12 level reached 20.6 million, and total enrolment at the higher education level touched 2.4 million students3.

Key trends that are shaping the sector include:

  • Sustained demand for education as a route to social and economic growth
  • Increased focus on regional capacity-building by planners
  • Government reforms to attract investment include easing business licensing, lowering fees, liberalising foreign ownership, and supporting women and young entrepreneurs
  • International private sector interest is evident in reputed universities setting up regional branches
  • The supply imbalance between premium operators and affordable education is creating space for mid-market institutions

At the same time, the sector is witnessing intense competition, gaps in supply and demand in sub-sectors, high operational costs and a shortage of educators, putting operators under increased pressure.

With private equity investors banking on this sector, there has been an increase in mergers and acquisitions (M&A) activity owing to realistic price expectations. Key examples of these are Nord Anglia Education, a Hong Kong-based operator of K-12 premium schools across China, Europe, Middle East, South East Asia and North America, acquiring the British School of Kuwait (BSK) in 20174.

Dubai-based Amanat Holdings, which focuses on healthcare and education investments in the GCC, acquired the real estate assets of NLCS Dubai for AED 360 million in June 2018, with an additional commitment of up to AED 45 million towards the school’s expansion plans5.

More recently, the UAE-based, Nasdaq-listed GEMS Education acquired Ma’arif Education Group, the largest private school owner and operator in Saudi Arabia, through a joint venture with Hassana Investment6, in May 2019, with plans to build 50 schools in the kingdom.

Supporting the education ecosystem

A sector-based approach enables HSBC to develop a proposition that takes into account the needs of the whole educational ecosystem. At the individual level, this translates into parent and student loans, financial capability training, and solutions providing international financial mobility to teachers.

At the investor level, there is funding support to build schools and universities. Investor interest allows education platforms to be asset light in terms of balance sheet in a sector that is capital intensive at the start with return on investment (ROI) being long-term. A financial institution with a sector-based approach can be a key part of this strategy by lending to the investors while supporting the operators. HSBC’s international presence allows investors to take advantage of cash pooling at the parent company level, while pursuing expansion opportunities in the MENAT region.

At the institutional level, school and college treasury teams can deploy more efficient and safe platforms such as HSBCnet to manage cash and reconcile student fees using virtual accounts.

Products that are particularly relevant to the sector include:

  • Bespoke cash management solutions
  • Receivables management
  • Purchasing cards that extend cash flow
  • Reconciliation of fees

A financial institution can be supportive in expansion of global education platforms as well in improving facilities.

At the same time, the HSBC’s active community initiatives help school and university students develop real-world skills via financial literacy and entrepreneurship programmes at its Innovation Labs. The bank taps into its extensive client network to facilitate programme development in emerging fields such as cyber security, digital technology and future skills.

It’s an exciting time for a financial institution like HSBC to provide support and financing option to a sector that is increasingly being viewed in the MENAT region as a crucial pillar in socio-economic development.

  1. https://argaamplus.s3.amazonaws.com/9e55ad53-477f-48f0-b202-2c2f03d6a03d.pdf
  2. http://wam.ae/en/details/1395302711134
  3. https://www.pwc.com/m1/en/industries/education/publications/education-country-profile-egypt.pdf
  4. https://www.markaz.com/Media-Center/Our-News/News-Details/2019/Markaz-Kuwait%E2%80%99s-private-education-sector-is-a-vit#.XQzqRugzY2w
  5. http://www.amanat.com/home/News/Amanat-acquires-real-estate-assets-of-North-London-Collegiate-School-(NLCS)-Dubai-for-up-to-.html
  6. https://www.reuters.com/article/gems-saudi-education/update-1-uaes-gems-buys-saudi-arabias-biggest-private-school-group-maarif-idUSL8N236172

Education

HSBC is helping foster MENAT’s education sector to help drive a knowledge-based economy.

Tatawwar

Tatawwar, is an exciting, interactive programme sponsored by HSBC which brings together students, schools, parents and the business community to help innovate for a shared future.

Future of Education

The COVID-19 pandemic has shaken up traditional models of learning in schools and universities. Although online learning has so far proven to provide certain benefits, this method of learning presents certain challenges. As such, educators need to find a middle ground.

You are leaving the HSBC Commercial Banking website.

Please be aware that the external site policies will differ from our website terms and conditions and privacy policy. The next site will open in a new browser window or tab.

You are leaving the HSBC Commercial Banking website.

Please be aware that the external site policies will differ from our website terms and conditions and privacy policy. The next site will open in a new browser window or tab.