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Opportunity EduFinance’s Support of Private Education in the Developing World

By Faye Ruck-Nightingale

This post originally appeared in January on the EduFinance blog here

At Opportunity EduFinance our absolute focus to help all children access a quality education.  Our School Fee Loans help kids access both public and private schools. Our School Improvement Loans help affordable private schools improve education access and quality provision for their local communities. We support private schools as we believe they fill the gap of accessibility where public schools are too large or too far away.  We believe locally founded and run affordable private schools are essential as public schools simply do not have the capacity to provide education for all school-age children. Affordable private schools offer education to children that are tragically missing out due to lack of, or poor quality public school provision.

Researchers Lant Pritchett and Amanda Beatty reached a concerning conclusion when studying the educational outcomes of public school students in Kenya: not only could half of the third graders they surveyed not read, but staying in school didn’t help counter this illiteracy. When the quality of school is so low—when teachers don’t show up for class, and classrooms are filled to overflowing, and even the most basic materials are hard to come by—you reach the point that Pritchett and Beatty did: “Kids are going to school; they’re just not learning anything.”1

An alarming statistic reiterated in last year’s  UNESCO / Word Bank2 papers which reported 6/10 children not learning despite almost 400 million of them being in school.

Pritchett and Beatty went on to describe their discovery as the “flatness of the learning curve”—a term that illustrates the true challenge of public education in the developing world, and the potential of private options. Their research draws attention to a problematic phenomenon in the education sector, and a promising opportunity for programs like Opportunity EduFinance. Private schools are emerging at a rapid pace, providing an accessible alternative to state-run options.

The EduFinance program has largely made its mark on education in the developing world by supporting affordable private schools. Typically managed by small-scale entrepreneurs, private institutions take advantage of a variety of market factors to improve education for students.

One of the most immediate challenges that private schools address is ensuring that all children have access to a school. These questions of accessibility consider geographical distance, as well as any other barriers to entry caused by transportation, safety, cost, or gender bias. For example, with regard to geographic accessibility, private schools have a notable advantage. In the Mathare slum in Kenya, for example, there are just 4 public schools, but 120 private ones.3 In Lagos, Nigeria, there are 18,000 low-cost private schools, compared to 1,600 government schools.4

Because affordable private schools are businesses, the local entrepreneurs that run them are able to identify and address openings in the market and build schools where they currently simply do not exist. These schools can access School Improvement Loans (SIL) through Opportunity EduFinance partners. SILs help improve school infrastructure and environment.  For example, they help schools construct private sanitation facilities, classrooms, dormitories or purchase vehicles to transport students, making the school more socially accessible for all students, and girls in particular.

While getting children to school is the primary challenge, the secondary issue is arguably even more significant. For parents concerned with their children’s futures, school is only useful if it serves its purpose—educating kids so that they can access further education, jobs, and sustainable livelihoods.

School must not only be accessible; it must be good. Further research by Pritchett and Beatty noted that even in some of the most economically impoverished communities around the world, parents chose to pay school fees instead of sending their children to an underperforming public school. Indeed, “poverty-stricken parents were choosing fee-charging private schools because they achieved much greater results than their government-run counterparts…In Hyderabad, India, for instance, mean scores in mathematics were around 23 percent higher in private schools.”5 

The private school model means school proprietors are immediately responsible to the parents that pay school fees; if they do not perform parents will not send their children to the school. Nobel laureate Amartya Sen noted, “In private school, the teachers are accountable to the manager (who can fire them), and, through him or her, to the parents (who can withdraw their children).”6 Public educators, on the other hand, don’t have this level of accountability, leading to high rates of truancy among teachers. In Africa, a World Bank study found that “teachers in state-run primary schools in some African countries were absent 15-25% of the time.”7 And in rural schools in India, researchers noted that a quarter of teachers weren’t in the classroom.8

In the local private schools that Opportunity works with school proprietors, the business owners, are responsible to parents, the consumers, to deliver goods and services that meet their needs. Opportunity EduFinance supports the schools and the parents, children and communities they serve to enable access to quality education. Andrew McCusker, Head of Opportunity EduFinance, comments:

The biggest demand from parents and carers is for their children to have a high-quality education—and that is what proprietors must deliver. Opportunity EduFinance fully recognises that the issue of quality relates to all schools, and is not isolated to public. Hence the creation of EduFinance’s Education Quality Programme in 2016, designed to help the affordable private schools we support improve the quality of education they offer.”

Opportunity’s Education Quality programme complements EduFinance’s financial services provision: School Improvement Loans help schools improve environment and infrastructure, Education Quality activities help schools improve the quality of education they provide. This is done through a mix of teacher professional development, school leadership training, learning materials, and resources. The programme is delivered via a Self-Improving School System working with local clusters of schools led by local Education Specialists; helping proprietors give their communities access to quality education through local affordable schools.

Put simply, “Inspired entrepreneurs have fostered a marketplace that is accountable to student satisfaction and success. Enabled with the freedom to compete with one another, to utilize local knowledge, these entrepreneurs have achieved a truly remarkable outcome: affordable private schools that are helping the poor.”9  

For further information on Opportunity EduFinance's Education Quality Programme click here and EduFinance's products and services click here.



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