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© 2016 Opportunity Internationala 501(c)3 nonprofit.

The 8 Rules of EduFinance Product Design

By Nathan Byrd

The role of Opportunity International’s Education Finance program is to turn microfinance products and services into vehicles of educational attainment.  Our job is to take the traditional model of microfinance and use it in a unique, innovative way that gets children into school and keeps them there.

The Education Finance program, at first glance, can seem to host a rather random cadre of products and services on offer to our clients.  This, however, could not be further from the truth.

Every time we launch a new product, or consider a new approach to our work, it must fall squarely within a set of guiding principles of EduFinance product design.

Breaking the bounds of cyclical poverty in education is no easy task.  It requires both focus and discipline in our product design.  Today, allow me to give you a sneak peak inside our solutions workshop that, to date, has touched the lives of more than 1,000,000 children around the world (and counting!!).

 

Our 8 Rules of EduFinance Product Design:

 

(1) Focus on The Major Challenges 

It is easy to get lost in all of the challenges facing families, children and schools in the developing world.  Trying to tackle every issue at the same time will inevitably result in precisely zero issues being tackled.  Therefore, in designing products and services, we have to limit our scope to overcoming the largest, most prominent systemic issues that keep children out of school.

In our extensive research leading up to the launch of Education Finance, we found those five major blocks to school enrollment and completion to be:

(1)  it’s too expensive

(2)  it’s too far away

(3)  the quality is low

(4)  it’s not applicable to real employment

(5)  we have no safety net (family disease, disability and death) 

All of our interventions must be designed in a way that significantly impacts one or more of these major challenges for everyone who accesses the product.  There are more challenges to completing an education in the developing world than most of us can possibly imagine; by tackling the biggest and hairiest problems directly through our interventions, we will give each of our clients the best possible chance at crossing that finish line in the distance. 

(2) Take a Holistic View of Transformation

First and foremost, we must recognize that Opportunity International is both a network of microfinance institutions and, by the nature of its mission, a development organization.  This means that not only are we here to serve the financial needs of a lower economic strata, we are here to serve and develop the whole person.  When envisioning the transformational ability of our products, then, we must see beyond the each product’s economic potential and explore, plan for, and develop the potential of our products and services to impact those that we serve from a personal, social, and spiritual perspective as well.  As we recognize in our mission and as we live our daily lives, we know that a person is far more than their economic reality: with this holistic vision of the way in which we serve our clients, we recognize our ability to fully respond to the needs of the communities in which we live and work.

(3) Be Nation- and Community-Driven Work

Inasmuch as we aim to recognize and respond to the needs of the whole person, we also recognize that these needs will vary from person to person, community to community, and nation to nation.  Therefore, the second principle to which we will adhere in the design and implementation of our products and services, is to allow them to be client driven and thereby reflecting local market needs.  We cannot expect the urban poor of Maputo, Mozambique to have the same exact needs of rural farmers in Sunyani, Ghana.  As such, and while it has a role to play, rather than allowing centralized product development to dictate the direction of our activities, we will allow our interventions to be responsive to localized needs, and will allow this need to adapt current products and drive the development of new ways forward.

(4) Serve the Lowest Possible Economic Strata with Sustainable Interventions 

It is undoubtedly Opportunity’s mission to serve the working poor, and as a network of microfinance institutions it is our responsibility to pursue sustainability in our interventions.  While our products and services, by virtue of their sustainability and transformational aim, may in themselves be attractive to individuals at higher economic levels, we must maintain as our vision the objective of serving the world’s poor.  It is in this spirit that with each step forward, we must plan our work in a way that target’s the poorest populations that we can reach while maintaining a sustainable approach.  While this may mean diversifying portfolios and serving a wider economic strata of clients, the end objective of each new initiative will have the broadest, most impactful service of the world’s poor at its core.

(5) Intentionally Graduate Products to Sustainability

As we build the Education Finance initiative, we must envision the program as it will be after donor funding completes its course or as donor priorities change.   A new product can oftentimes bring in funds to support associated operational costs, parallel programming, training and even incentives, but what happens when that funding is spent?  In building out Education Finance products, we will look to the long-term integration of the product in the market and ensure that within a reasonable time frame it will become fully self-sustaining, either on its own or subsidized from the bank’s larger portfolio with clear managerial interest and buy-in.  We will not design or implement products that use non-sustainable (i.e. grant-based) funds to inflate or create false expectation within the market, and will come out of each product design with a long-term plan for self-sustainable operation.

(6) Be Living and Responsive Products

As a network of locally based and operated microfinance institutions, Opportunity benefits from a tremendous breadth and depth of experience, knowledge and vision both at the local and global levels.  While we will drive this and similar initiatives from a global perspective seeking to take advantage of centralization, where we can (e.g. systems integration / delivery, MIS, high level design, etc) we will allow our products and services to be responsive not only to local needs, but to localized innovation and thought leadership.  Ownership of our concepts, though integrated with and driven by the global leadership, must be rooted at the national level and within the leadership, rank and file of Opportunity’s implementing members.  This means that every product design and every transplant of best practice must be flexible enough to adapt to local market demands, key local knowledge, and the many environmental factors in which each implementing member works. 

As an organization so diverse and deeply knowledgeable at the local level as Opportunity, we recognize the tremendous benefit that such a structure affords. 

The active identification and sharing of best practices is not only in our clients’ best interest, it is quite possibly the Opportunity Network’s greatest strength, and therefore must be a key focus of our work in developing new and continued strategy.

(7) Be Outcomes-Driven 

Designing “living and responsive products” also requires us to be guided in our work by objectively monitored and evaluated outcomes.  In our aim to design products and services that are as transformationally impactful as possible within the Education Finance initiative, we will design metrics that allow us to measure our real impact on clients and beneficiaries, and respond by adapting, withdrawing, or scaling up products and services according to those measures.

(8) Hold a Multi-Dimensional View of Education

Education is not a simple thing.  Bricks and mortar of school buildings alone do not make an education, and neither do textbooks.  Both are an integral part of a full educational experience, along with good teachers, quality administrators, teaching aids and materials, proper technical facilities, family support, consistent funding, relevant curriculum, and many other pieces that come together over the course of more than a decade to make a child’s education complete.  When planning our interventions, though we may not always touch on each of these, we must plan and implement with a full understanding of the educational experience and all that goes into it.  We can consider a four axis vision of education to summarize, including access for all (which includes school survival), educational quality, relevance of education, and the financial solvency/sustainability of educational institutions in order to foster long-term community growth and constant support structures for children and families.

Nathan Byrd is Head of Education Finance at Opportunity International. 

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