Gender Equity in Education Finance: Business for Good

This blog was originally published on edufinance.org.

Opportunity EduFinance recently hosted a compelling webinar focused on advancing gender equity in education finance.

The global education landscape reveals a striking disparity: while women make up the majority of educators at the pre-primary level, they remain significantly underrepresented in higher educational roles and leadership positions. This disparity extends to the financing of education in low- and middle-income countries, where gender-equitable approaches could unlock significant market potential.

Financial institutions have the opportunity to tap into a US$36 billion market in non-state education for financing – such as school improvement loans - and address the US$1.7 trillion financing gap for female-led enterprises. Highlighting this market opportunity, this webinar explored actionable strategies to advance gender equity in education finance, offering valuable insights for those looking to expand their impact and market reach.

Introducing Our Webinar Panelists:

This webinar brought together a distinguished panel of banking practitioners, each contributing a unique perspective on gender equity in education finance:

• John Patrick, from Sidian Bank, Kenya, discussed the bank’s approach to supporting women-led schools and the role of concessional finance and portfolio guarantees in reducing financial barriers for female entrepreneurs in education.

• Adela Sagastume, from Fundación Génesis, Guatemala, shared her experiences with entrepreneur loans and the challenges and successes in promoting education financing for underserved communities, focusing on improving education access and reducing learner dropout rates.

• Kamran Azim, from Taleem Finance, Pakistan, provided valuable insights into the challenges of women entrepreneurs providing collateral and the importance of flexible financing solutions and non-financial support, including teacher training and technology adoption.

In the moderator role, Deborah Foy from Opportunity International highlighted the broader potential and impact of gender-equitable education financing and the need for targeted subsidies and partnerships to address both financial and non-financial barriers in the education sector.

If you missed it, watch the webinar here: 

5 Key Takeaways: Advancing Gender Equity in Education Finance

1.  Derisk Education Financing with a Women-Centric Approach

John Patrick from Sidian Bank in Kenya shared the success of focusing on women-run schools. His bank has observed that female school proprietors often have lower default rates compared to their male counterparts. By offering loans to schools run by women, Sidian Bank not only supports education but also ensures profitable returns. Women-run schools, often led by women in the community, present a lower-risk profile, which has encouraged Sidian Bank to provide more loans in this sector. Additionally, the bank's strategy includes concessional financing, and portfolio guarantees to further reduce financial burdens on women-led institutions.

2.  Use Innovative Approaches to Collateral to Increase Gender Equity

Kamran Azim from Taleem Finance in Pakistan highlighted the challenges and solutions related to collateral for women entrepreneurs. Contrary to the myth that women lack valuable assets, many female school owners have properties or other assets that can be used as collateral. Taleem Finance has adopted flexible collateral options, including movable assets like vehicles and even gold, to make financing more accessible to women. This approach not only helps women secure loans but also enhances their credibility and reduces the markup on loan interest rates related to a perceived lack of collateral. The bank’s efforts include breaking societal myths and encouraging women to leverage non-traditional assets for financing.

3.  More Concessional Finance and Technical Assistance is Needed

John Patrick also emphasized the importance of concessional finance and technical assistance to increase gender equity. In Kenya, the high cost of funds can make loans burdensome for educational institutions. Concessional financing helps reduce these costs, making education loans more affordable, including for women owners. Additionally, technical assistance and capacity-building support are crucial for schools, especially those run by individuals with limited administrative experience. Partners who offer portfolio guarantees and performance-based incentives are instrumental in encouraging more lending to women-led schools.

4.  A Holistic Approach Can Positively Support Increased Gender Equity in Education Finance

Adela Sagastume from Fundación Génesis in Guatemala discussed the broader challenges of gender equity in education finance. Addressing basic needs such as family food security is essential to promote sustained investment in education. Fundación Génesis has introduced a holistic family-focused model called the “Development Path,” which not only covers financial needs but also addresses housing, basic services, and education through various programs. One innovation highlighted was a lending product tailored to rural areas, aligning repayment schedules with the fluctuations in agricultural income. This product can be used for education, among other purposes. Additionally, Fundación Génesis has an active Training Team and has reached over 600,000 people with education in financial literacy, business tools, productivity, sustainability, soft skills, and values and principles. These initiatives aim to improve educational outcomes and reduce learner dropout rates by addressing financial and logistical barriers to education.

5.  School Quality is Best Addressed by a Combination of Gender-Equitable Financing Approaches, School Partnerships & Non-Financial Support

Kamran Azim stressed that education finance alone cannot solve all challenges. Investments in teacher training, technology adoption, and school management systems are essential for improving educational quality overall. Financial institutions play a catalytic role by providing the necessary capital using inclusive gender-equitable approaches, but partnerships and targeted subsidies are also crucial for addressing non-financial needs. Engaging with various stakeholders and leveraging blended finance can enhance the impact of education financing.

The webinar underscored the critical role of gender equity in education finance. By adopting gender-equitable approaches, financial institutions can bridge significant financing gaps and unlock substantial market opportunities. Addressing both financial and non-financial barriers through innovative strategies and partnerships is essential for creating a more inclusive and effective education system. As we move forward, integrating gender considerations into education finance technical assistance will be key to achieving sustainable and impactful outcomes.

For those interested in expanding their education finance portfolios and advancing gender equity, the insights shared in this webinar provide a valuable roadmap. Engaging with the Opportunity EduFinance Technical Assistance team and exploring partnerships with organizations offering concessional finance and technical assistance can further support these goals.