Facilitating Financing for Education Drives Growth

Q: What are the primary challenges that educational institutions face in their collection processes?

A: The educational sector has historically been neglected. Traditional financial institutions usually do not consider schools as a viable option for lending. There are several reasons for this, the most important being that financial institutions typically require collateral. In the case of an educational institution, the collateral would be the institution itself. If anything goes wrong and the school defaults on its payments, the only option for the financial institution would be to seize the school, leaving many children without access to education.

There are also structural factors within the industry itself that make financing difficult. For example, out of Mexico’s 32,000-34,000 private schools, most are operated and owned by people with academic backgrounds rather than financial or business expertise. These individuals start educational projects with the noble vision of transforming their communities, but they often lack experience in financial and business management. Consequently, they find it challenging to manage financial aspects and may not be as inclined to use financial tools and administrative processes for their operations.

Our goal is to be a financial and strategic ally for schools, helping them focus on their core  — education — while we handle their financial needs.

Q: How do Mattilda’s solutions assist schools in overcoming these challenges?

A: Mattilda identified two clear opportunities in schools: operational problems and financial problems, which are closely linked. Financially, there is limited access to financial services and products and a lack of sophistication in their use, which inhibits growth. To address this, we offer two products aimed at solving financial issues for schools.

First, we have our guaranteed income product to address liquidity problems in private schools and universities. Parents often delay tuition payments for various reasons, putting a strain on the school's cash flow. Mattilda steps in by guaranteeing the school's income, paying them at the beginning of each month, and handling the collection of tuition fees. This ensures schools know exactly how much money they have at the start of each month, simplifying budgeting and planning.

Second, we offer financing or credit products. Schools have limited access to capital, so those looking to expand usually have to rely on savings. Mattilda provides loans designed to help schools grow, helping them expand more rapidly. We have numerous success stories, such as a school in Tijuana, Baja California, that used our financing to build a high school and university, and a school in Merida, Yucatan, opening another branch targeting a different socioeconomic segment.

Q: How many customers does Mattilda serve?

A: Over 200 schools and more than 100,000 students are using Mattilda. We operate primarily in Mexico but recently expanded to Colombia and Ecuador, where we have seen similar positive results. On a monthly basis,      we process over MX$150 million of payments on behalf of our schools, and we  have provided over MX$1     00 million (US$5.5      million) in financing over the past two years, enabling schools to expand significantly. For example, a school in Tijuana increased its capacity by 50% with our funding, and a school in Tamaulipas expanded its facilities by 30%. Our financing helps schools grow and meet the high demand for quality private education.

Q: How does Mattilda’s platform automate the collection process for educational institutions, and what are the key benefits?

A: Mattilda offers schools two clear benefits. First, it reduces parents' delinquency. Typically, schools have contracts with parents stipulating specific payment deadlines. If payments are delayed, there might be penalties, but enforcing these penalties can be challenging due to personal relationships between school owners and families. Our automation processes, such as notifications for tuition payments, significantly reduce delinquency. Parents receive reminders on the first and 10th of each month, making it easier for them to remember and make timely payments with just a few clicks on their phone.

Second, automation reduces the administrative workload. Tasks like sending reminders to parents, reconciling payments, and issuing invoices are typically manual and time-consuming. By automating these processes, schools save between 30% and 40% of the administrative team's time, on average. This allows them to focus on more valuable activities, such as improving academic programs and marketing.

For parents, the main benefit is convenience. They can pay tuition through their phones using various methods, including credit cards, bank transfers, or cash at convenience stores. This eliminates the need for them to visit the school in person to make payments, making the process much more efficient and user friendly.

Q: What are the main challenges the company has encountered in getting more institutions to adopt its solutions?

A: There is always resistance to change, especially in the educational sector, which has operated in a similar way for centuries. Introducing innovative solutions can be daunting for schools. Fortunately, the pandemic accelerated the adoption of technology, forcing schools to adapt quickly. This shift has made it easier for us to introduce our solutions.

Parents have also become more comfortable with digital payments and online services. The fear of data breaches and fraud is still present, but we have invested heavily in top-notch security measures to ensure data protection. Our payment gateway and cloud data management systems are among the best in the industry, providing a secure and seamless experience for users.

Q: What technologies does Mattilda employ to ensure the security and efficiency of financial transactions for schools?

A: Mattilda ensures the security and efficiency of financial transactions for schools through significant investments in advanced technologies. One of our core technologies is a state-of-the-art payment gateway, which ranks among the best globally. This gateway is meticulously designed to ensure secure and reliable transactions, providing schools and parents with peace of mind regarding their financial interactions.

Mattilda also employs top-tier cloud data management solutions. We partnered with leading providers in cloud data management to ensure the safety and integrity of all information processed through our systems. This investment allows for efficient data handling and storage, meeting the highest standards of security and compliance.

Q: What will success look like for Mattilda by the end of 2024, and what strategies will be employed to get there?

A: By the end of 2024, we aim to be working with over 250 schools and more than 150,000 active users. We are on track to exceed these targets, likely      reaching more than 300 schools and over 200,000 students. Our goal is to continue expanding and solidifying our position as the financial and strategic partner for educational institutions in Mexico, Colombia, and Ecuador.

Mattilda allies with educational institutions in Mexico and Latin America to accelerate their growth through technological and financial tools and services.