Context Matters: Expanding EduFinance to Ethiopia
In business, science, economics, and even relationships, there is an oft-quoted expression that shapes so much of what we do: context matters.
Put simply, it means that the space (or time, or circumstances) in which something operates impacts how the thing works. A great idea for a 15-year-old might not work for a 5-year-old. Best practices from 20 years ago might be irrelevant today. And a program that thrives in Nicaragua might be a total flop in Nigeria.
Being able to evaluate and respond to a given context is essential for the success of an initiative. It’s one thing to know something works—and it’s another to know that it works here, now, for this audience.
As an organization that works in 30 countries around the world—one that is constantly developing new programs and reaching new communities—Opportunity International knows the importance of context. And a great example of responsive, context-aware innovation is our work in Ethiopia.
The Context of Ethiopia
Ethiopia is the second most populous country in Africa, with over 120 milllion residents. And with its central location in the Horn of Africa, surrounded by countries like Eritrea, Sudan, and Somalia that have long struggled to maintain stability, Ethiopia hosts one of the largest refugee populations in the world—more than 800,000 people.
This huge population is also incredibly young. The median age in Ethiopia is only 19.5 years—and about 40% of the population is under the age of 15. Another 30% is between the ages of 15 and 29.
This enormous youth population presents both a challenge and an opportunity.
With so much potential to learn, grow, and lead, these young people could transform the future of Ethiopia. On the other hand, educating such large numbers of children can be incredibly expensive. How can a country expand its educational infrastructure to meet the rising demand of a booming youth population? And how do you keep these children in school, learning, as schools become increasingly crowded?
As UNICEF noted, “Ethiopia can lift itself out of poverty by ensuring children have access to education. [But] although most children enroll in school, many do not complete their education: 85% make it past Grade 5 and 54% past Grade 8. Sixty-three percent of students in lower primary schools are not achieving the basic learning outcomes.”
This is the context. And this context matters.
Stepping into a New Environment
Opportunity International knows how to help bolster schools and education systems—we are industry leaders with a decade of experience piloting and scaling Education Finance.
We know Ethiopia is a rich market for resources like School Improvement Loans and services like EduQuality. Bolstering the low-cost private school sector in a country struggling to meet the educational demand of a booming population of children makes good sense.
But context still matters.
Given Opportunity’s model of investing in existing low-cost private schools, Ethiopia’s relative scarcity of private schools presents a challenge. In addition, The regional conflict that has led to hundreds of thousands of refugees and over 4 million internally displaced persons makes it hard to implement new operations without great risk. Finally, government regulations have historically limited liquidity in banking—making innovative tools like Education Finance tougher to implement.
Our first step, before implementing a single program, was to listen. In 2018, we published a market knowledge report based on in-depth research of educational needs in Ethiopia. We learned that 83% of schools would be interested in taking a loan for school improvement and 87% of parents would borrow to pay for school fees.
The demand was there.
While the pandemic delayed expansion plans, in 2022 we conducted another relationship-building visit that yielded six new prospective partners in the country. Our work is only possible with strong, mission-aligned partners, and we can’t wait to see these come to fruition.
Expanding Programs in a New Context
Now, we are ready for growth. We have identified demand. We have identified partners. And we have a model that works.
Expansion happens carefully—informed by context so that we are meeting real needs. And when done well, it has the potential to transform the future.
As USAID reported in 2017, “The knowledge, skills, and capabilities of [Ethiopia’s] future working-age population will determine the extent to which it can realize its demographic dividend and the associated economic growth all Ethiopians desire.”
Education Finance is one of Opportunity’s most successful initiatives—and one that has the potential to scale around the world. As we introduce this powerful model to new cultures and communities, we do so with care and intention. We rely upon research and relationship-building. And we remember that our ultimate goal of EduFinance is to give more children access to high-quality education—that the “what” is fixed, but the “how” is necessarily flexible. Because context matters.