Transforming financial markets to expand affordable quality education
CapPlus’ Education Markets Impact Initiative (EMII) unlocks the education finance market, while using finance to drive access to improved education quality. In sub-Saharan Africa, 97 million children are not in school. 88% of school-aged children do not meet the minimum learning proficiency levels. The youth population is expected to more than double in the next 12 years, and youth unemployment is already high.
Parents have voted and local education entrepreneurs are stepping in to fill the gap. In just the six sub-Saharan African cities CapPlus studied, 39% to 86% of all primary students, 50% girls, attend private schools – a vastly underserved small business sector. School entrepreneurs – many of whom are women – cannot expand their schools or improve quality due to a lack of credit.
CapPlus estimates the demand for finance in these cities to be in excess of $4 billion – a massive and profitable market opportunity, as financial institutions like ISFC and Varthana in India and Sinapi Aba Saving and Loans, an IDP Rising Schools partner in Ghana, have already discovered.
CapPlus’ Education Markets Impact Initiative uses this immense demand for finance as a lever to drive improved education outcomes through loan conditions, incentives, and more intensive interventions. Meeting just 50% of the market demand in Abidjan, Abuja, Accra, Lagos, Kampala and Nairobi would transform financial markets and deliver significant impact for girls, youth and women:
- 5.14 million children would receive a better education; 50% girls
- 1.75 million more children could attend school as new classrooms are built
- 235,000 school jobs would be held by 94,000 youth and 158,000 women
- 5,700 women entrepreneurs would receive credit and nonfinancial services
- $3.94 billion in financing leveraged by the financial sector
Over ten leading financial institutions in these markets have already signed MOUs with CapPlus to build their capability in financing affordable education in ways that also drive education improvements.
How EMII works: EMII, a $31 million, 5-year initiative, works across 5 African countries – Kenya, Uganda, Ghana, Nigeria and Cote d’ Ivoire uses financial institutions as aggregators of schools, parents and children to drive education improvements as a pathway to greater economic equity and inclusion:
The initiative has four components:
- Equips financial institutions to finance schools in a manner that drives quality improvements, as well as serve parents to increase their economic resiliency, including through digital services
- Spurs higher quality education and strengthens schools by rigorously testing a range of methods to improve learning outcomes, and providing financial management training to proprietors
- Provides affordable, patient debt, where needed, to financial institutions to lend to locally-owned schools
- Engages Ministries of Education in shared learning from experimental approaches to drive improved learning outcomes on a sustainable basis