PROPOSAL FOR ALPHA ISLAMIC QURAN

SCHOOL

TO BE: IMPLEMENTED IN OROMIA REGION WEST ARSI ZONE

SHASHEMENE CITY ADMNISTRATION

Shashemene, Ethiopia
October/2024

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1. Executive summary

No Summary Project description

1 Name of the project Alpha Religious Quran school
2 Owners Project Promoters
3 Location Oromia region West Arsi Zone Shashemene city administration 04kebele
4 Capital The total capital of the project are birr 100,000were owners contribution
100%with equal shares
5 Grade level Religious/Qur’an school

6 Land /area/ required 1,000m2

7 Job opportunity The project employed over 4 personnel and the rest 10 are proposed for the
future
8 Types of technology Audio visual aid, modern system of teachings.
9 Target market to minimize the gap of religious education in the city administration

2. Background of the business

Religious school is one of the decisive instruments in an endeavor towards breaking the vicious
circle of poverty as the objective reality in the 21st century indicates. It is education and training
that liberates citizen from ignorance and acquaints them with modern civilization to 'pave the way
for further development and prosperity as well. The secret behind the developed nations or the
countries that registered speedy development further proves this reality. Besides this, education is
regarded as human right more than being a key to development and progress in developed nations.
Even though, education is found crucial in many aspects. Introduction of modern religious
education in Ethiopia is said to be relatively a recent phenomenon i.e., Not more than a century The
expansion of educational service was found deficient for the fact that it could not address the need
for further access, quality, relevance and equity problems.
The status of education in shashamane is a manifestation of the overall scenario of education in the
country. Moreover, education as key for development as well as human right has led to Universal
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Primary Islamic Education (UPIE) - as a focal point of interest at international level. To actualize
this interest years have passed since countries committed them-selves to universalize primary
Islamic education. Ethiopia is also among of those countries that committed to provide primary
education to all school aged population.
Religious Education is one of the most important aspects of human development. It plays a pivotal
role in the socio economic development of a nation and a society. Provision of basic, quality
education being one of the major millennium development goals (MDG), social and family
situations of school age children from different segments of the society is the order of the day.A
limited number of class rooms coupled with poor facilities of the school makes the learning-
teaching process difficult. The class size ranges 30 to 50 students per room.
Islamic education is a form of religious education in which children aged four above are taught
through creative play, social interaction, and natural expression. Play is a significant aspect of
specially chosen work materials, and stories to address the needs of small children. It is aimed at
growing children in a free atmosphere away from home. Accordingly it is sometimes
called“children’s garden”. It serves as a transitional stage from home to the more formal schooling
that followed.
In class, they are introduced to the alphabet, numbers, and colors; they study their bodies,their
families, and their communities; they listen to stories read aloud; they make art projects; they
participate in skits and dramatic productions; and they learn about holidays, plants, animals, and
other topics in Islamic studies. Some children’s also teach introductory reading and mathematical
skills. So, it’sused as a base for grade students and that is why we start our investment on education
starting from nursery/kindergarten school level.
Shashemene city is located in Oromia National Regional State, in West Arsi zone, at a distance of
250 km from Finfinne the capital city of Oromia and Ethiopia.

3. Background of the Promoters

The Alpha Islamic School was established in Oromia region East West zone Shshemene city
administration at in 2016E.C to solve the town’s society educational services provision.
The promoter has different educational qualities and business experiences to promote and make
profitable of the business

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 Objective

The objective of establishing the alpha Islamic is to provide a stable source of

affordable funding for an educational institution, catering to a marginalized
community in the society, for its sustainability and save futures of many
students.

Mission

The mission of the ALPHA Islamic school is to convert a private school

“ALPHA School” (formerly lack of Islamic School) to provide free and high-
quality education along with personality development, positive attitudes and
enrichment opportunities, while maintaining Islamic standards.

CORE VALUES
 Quality and internal efficiency: ensuring student completion and achievement
 Focus on quran and hadis.
 Improving management capacities
 Early Childhood Care and Education

SERVICE DESCRIPTION AND APPLICATION

Religious education is a form of school education in which children aged four and above are taught
through creative play, social interaction, and natural expression. Accordingly, it is sometimes
called“ children’s garden”. It serves as a transitional stage from home to the more formal schooling
that followed.
In class, they are introduced to the alphabet, numbers, and colors; they study their bodies, their
families, and their communities; they listen to stories read aloud; they make art projects; they
participate in skits and dramatic productions; and they learn about holidays ,plants, animals, and
other topics in science and social studies.
MARKET STUDY
Ethiopia is a vast and diverse country with the second highest population in Africa estimated at
around 110 million in 2015 E.C and it is growing rapidly at an average annual rate of 2.6%.
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Children under15 years of age account for over 33 million of the total population.
The basic reasons the private sector is dominating in mderesa and primary schooling is that:
• The government policy that focuses on providing basic education to all and accordingly the
government is not investing .
• Traditionally, in the town and in the country as a whole Islamic quran is the domain of the
private sector, and
• Compared with Islamic college, investment required in mderesa and primary school is small,
which attracts the private investors with weak financial capacity School enrolment ratio is one vital
indicator that measures performance in education sector. Enrollment at kindergarten level in the
town is still very low. Access to education at kindergarten level is still very limited in the town.

Table 1Supply Gap

SUPPLY GAP IN BASIC EDUCATION FACILITIES BYTYPES AND LEVEL OF
EDUCATION IN THE TOWN
Level of education Number of school section Supply short fall
At present Required
Mderesa (0-6) 200 above 1000 800
Total 200 1,000 800

MARKETING STRATEGY
Pricing
Service fee depends on the quality and the types of services offered at a Islamic school. Currently
the monthly service charges per children vary from Birr 400 per month to Birr 500 per month.
PRODUCT AND SERVICES
SERVICE CAPACITY AND PROGRAMME
1. Service Capacity
As per the above data of demand projection, the annual demand for Islamic school is 1,000 in the
year 2006/2017 and this demand grows to 2186 in the year 2017/18.

Table 2 SRVICE PROVISION PROGRAMME

Service Year of service provision
1 2 3
% of provision of capacity 80 90 100
Total number of section 16 18 20
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 Total number of student 1,280 1,620 2,000

MATERIAL AND UTILITIES

The main materials and inputs required for the provision of Islamic education service are given on
Table 3. The cost of these and other related materials are estimated to be of Birr 3,000,000.00 in
local currency at full capacity operation of the center.
S.N Material UoM [Link] cost

1 CURRICULUM: Package 30,000

• Responsive to individual and social need
•Comprehensive coverage
• Adaptable to changing
2 EDUCATIONAL MATERIALS: Lump sum 20,000
• Quantitatively adequate
• User friendly, easily exploitable and
challenging to both instructors and learners
• A judicious mix of print audio-oral materials
• Closely related to the goals of the curriculum
3 Cleaning materials Lump sum 70,000
4 Stationery materials Lump sum 100,000
5 Other miscellaneous items 13,000
Total 133,000

4. UTILITIES

The major utilities required by the center are electricity and water. The estimated annual
requirement at full capacity and the corresponding cost is given below.
Table 4 Annual Utilities Requirement
S/n Description UoM quantity Total cost
1 Electricity [Link] 8500 4,000
2 Water M3 6500 21,000
Total 25,000

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Why Muslim community prefers private schools?

shashamane is a multi-ethnic society in which Muslims and others have

coexisted for centuries. The Muslim population of Shashamane has been
between 80-90%of the total population over the years and considered as
minorities.
Most of the schools (Public schools) in Shashamane are maintained by the
government as a part of the free education. Currently there are over 300
private and government schools with a student population of 200,000
thousand and over 12,000 teachers.

There are 10 Muslim schools in the country and this number is insufficient
compared to the population of Muslim children of the country to
accommodate them all. The percentage of Muslims gaining admission to Non
Islamic Government schools is also based on Quota and Provincial allocations
by the government.
The students undergo thorough background checks before they are admitted
to government schools. The criterion to enroll students to government
schools, such as producing proof of documents for permanent residency and
fixed/ permanent income of parents, etc. is a bottleneck for parents who do
not have permanent residence and/or fixed income. Other factors including
non-availability of schools within easy reach, absence of Islamic dress code,
cultural aggression by the dominant community, biasness in religious
curriculum, etc. also found to be operative.

Due to this reason the Muslim community has less enrolment to government
schools and seeks out for education at private Islamic schools where
education is provided according to Shariah law.

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Background

Alpha Islamic School was founded in 2016 with just 20 students and
continued its journey with a view to establish an educational institution. The
school catered to the curriculum given by the Educational Department of the
country in English medium, while preserving the Islamic identity and values
of Muslim children.

In 2016, the school was re-branded as alpha Islamic School. Currently it has
a student population of over 600 and 20 academic staff in its branches.

Branches
 Awasho
 Melka oda
 Dida boke
 Kuyera

Geographical location

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It enrolls students from mderesa ,Quran ifiz to Grade two separate
sections, for male and female students and operates as an independent, co-
educational institution that provides high quality and college , balanced
education for students within Islamic values. It also has an extensive
extracurricular activities program aimed at building leaders with positive
attitudes, groomed with self-confidence to face the world.

The main school is located in Shashamane ,Alpha Islamic schools with

separate sections for Boys and Girls.

Section1,Quran (juner quran )

Section2,(madresa I – 4)
Section3, (madresa 5– 6)

These students are merely from a background whose parents have a very
poor income. Most of their parents are three wheel drivers, market traders,
laborers and housemaids and are unable to afford their children’s school
fees due to soaring cost of living.

Due to this reason the management was compelled to adjust the fee structure
as per their affordability. Nevertheless nearly 50 students obtain education for
free of charge.

This situation for over twelve years constantly, has now affected the schools
revenue severely, from which it cannot meet at least one third of the total
overhead and is now experiencing lack of necessary fund to meet the
overheads and to fulfill learning requirements to the students, resulting to
increase number of investors. But still the real demand for financing has not
been increased as expected.

Despite the huge funding need, school is lacking the resources and facilities
that their students are exposed to on a daily basis. For example, comfortable
desks and chairs, ventilation and technological improvements such as
computers and internet access, that usually government schools have.

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The following images will represent the real status of the school.

A) A class room of girls senior section

B) Benches used by students (girls senior section)

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C) The school passage used as a play ground by boys senior section

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 D) Lack of Sanitary facilities

Due to geographical division such as primary classes, senior classes of the

school, force them to use more effort in order to network with students-
teachers and to get the materials and resources needed.

It also has stagnated in development and even deteriorated. Some of these

buildings are already dilapidated with the passing of time making them too
weak which is even a danger to the students and their teachers in case they
bulge in or collapse altogether. These Crumbled buildings, makes the
learning environment unsafe and not motivating for the students.

Since the school does not have sufficient funding and with continuous deficit,
they are not able to tailor facilities to the student's needs. As a result the
school is currently facing a dire situation and a state of closure.

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 Expected accomplishment
As a solution to this serious matter, the ALPHA Islamic school decided to call
out funds from generous and potential donors in order to keep the school up
running and convert the school to a charitable school from where the
students from very poor families enjoy free education.

Expected outcome
This will in turn give many children from middle class families to receive a
better education, good learning conditions and facilities and prolong the
existence of the school saving lives of over 600 Muslim students.
This will root them to improve their social status and employment
opportunities to support themselves and enables them to become good
future leaders to serve various sectors of the economy and improve the
economy of Shashamane.

The list of machinery and equipment is given in Table 5. The total machinery andequipment cost is
estimated at Birr 441,500, which is totally required in local currency.
S/N Description Qty Total cost

1 Outdoor playing equipment (slides,swings,and etc.) 7set 45,000

2 Indoor playing equipment (various child educational toys) L.S 3,500
3 Children beds and kids bed room accessories L.S 10,000
4 Computers 5 75,000
5 For Green area masonry 1 22,500
6 Refrigeration 1 18,000
7 Chairs and tables 250 250,000
8 Teaching materials (Black boards, slides etc.) L.S 17,500
Total 441,500

5. Land, Building and Civil Works

The envisaged project will require a total land area of 1,000m 2 of which 350m2 is built up area and
500m2 by playing and 150m2 are greenery areas.
Table 6 Land use plan
S/N Description Land use
1 Educational Building area 350m2
2 Administrative building area 150m2
3 Playing areas 150m2
4 Store 100m2
5 Lounge 100m2
6 Green area 150m2
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 Total 1,000m2

HUMAN RESOURCES PLAN

MANPOWER REQUIREMENT
The project will require 5 workers. The annual total cost is estimated at Birr 1,788,000.00
The detail breakdown of manpower requirement and annual salary expense is shown in table
below.
Table 7 Human Resource
S.N Description No. required
Monthly Annual
1 Director 1 6,000.00 72,000.00
6 Teachers 3 4,000.00 144,000.00
9 Guards 1 2,000.00 24,000.00
Total 5 20,000.00 240,000.00
6. TRAINING REQUIREMENT

It is suggested to train teachers and assistant teachers for a period of three month. The training will
be given by one of the institutions available locally. The cost of such training is estimated at Birr
50,000.00
7. FINANCIAL ANALYSIS

The financial analysis of the Islamic school project is based on the data presented in the previous
chapters.
8. TOTAL INITIAL INVESTMENT COST

The total investment cost of the project including working capital is estimated at Birr 3,000,000.00
million. The major breakdown of the total initial investment cost is shown in Table below.
9. OPERATING COST

The annual operating cost at full capacity operation is estimated at Birr 906,410.00(see Table). The
major components of the operation cost are financial cost and direct labor. The remaining is the
share of material and inputs, utility, labor overhead, repair and maintenance and administration
cost.
Table 8 ANNUAL PRODUCTION COST AT FULL CAPACITY
S/N description Cost
1 Material and Inputs 36,000.00
2 Maintenance and repair 150,000.00
3 Labor direct 25,690.00
4 Labor overheads 350,280.00
5 Administration Costs 145,950.00
Total operating cost 707,920.00

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10. REVENUE PROJECTIONS

The project is expected to generate a net profit of birr 295,680in the first year and 684,250at the
end of 3rd year and onward of the project life. Table 9 below shows this fact.
Table9 projected income statement
Proposed Total Deduction Costs Total costs Profit before tax Income tax Net income
revenue
Operating Depreciation &
costs repair
877,200 400,000 50,000 450,000 427,200 131,520 295,680
1,578,900 900,000 60,000 960,000 618,900 234,615 384,285
3,000,000 1,850,000 125,000 1,975,000 1,025,000 340,750 684,250
11. Project income statement

Project income statement show that, the project will start to generate positive profit the first year of
operation. The income statement and the other indicators of profitability show that the project is
viable. As can be seen in the financial statement, the project could have positive cash flow of
295,680birr at first year and it would 684,250birr at the 3rd year and on ward.
Table10 Discounted cash flow
Item Year 0 Year 1 Year 2 Year 3
Initial investment (800,000.00) - - -
Working capital (200,000.00)
Total cash inflow - 877,200 1,578,900 3,000,000
Costs of operation - 450,000 960,000 1,975,000
cash inflow before tax - 427,200 618,900 1,025,000
Income (corporate ) tax - 131,520 234,615 384,285
Net cash inflow - 295,680 384,285 684,250
Total annual cash flow (1,000,000) 295,680 384,285 684,250

. FINANCIAL EVALUATION
1. Profitability
Based on the projected profit and loss statement, the project will generate a profit throughout its

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operation life.
. Ratios
In financial analysis financial ratios and efficiency ratios are used as an index or yard stick for
evaluating the financial position of a firm. It is also an indicator for the strength and weakness of
the firm or a project. Using the year-end balance sheet figures and other relevant data, the most
important ratios such as return on sales which is computed by dividing net income by revenue,
return on assets (operating income divided by assets), return on equity (net profit divided by
equity) and return on total investment (net profit plus interest divided by total investment) has been
carried out over the period of the project life and all the results are found to be satisfactory.
4. Break-even Analysis
The break-even analysis establishes a relationship between operation costs and revenues. It
indicates the level at which costs and revenue are in equilibrium. To this end, the break-even point
of the project including cost of finance when it starts to operate at full capacity (year 3) is estimated
by using income statement projection.
BE = Fixed Cost
Sales – Variable Cost
4. Payback Period
The payback period, also called pay – off period is defined as the period required recovering the
original investment outlay through the accumulated net cash flows earned by the project.
Accordingly, based on the projected cash flow it is estimated that the project’s initial investment
will be fully recovered within 5 years.
5. Internal Rate of Return
The internal rate of return (IRR) is the annualized effective compounded return rate that can be
earned on the invested capital, i.e., the yield on the investment. Put another way, the internal rate of
return for an investment is the discount rate that makes the net present value of the investment's
income stream total to zero. It is an indicator of the efficiency or quality of an investment. A
project is a good investment proposition if its IRR is greater than the rate of return that could be
earned by alternate investments or putting the money in a bank account. Accordingly, the IRR of
this project is computed to bepositiveindicating the viability of the project.

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6. Net Present Value
Net present value (NPV) is defined as the total present (discounted) value of a time series of cash
flows. NPV aggregates cash flows that occur during different periods of time during the life of a
project in to a common measuring unit i.e. present value. It is a standard method for using the time
value of money to appraise long-term projects. NPV is an indicator of how much value an
investment or project adds to the capital invested. In principal a project is accepted if the NPV is
non-negative.

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