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Financial Inclusion

Learning by numbers

Despite being a successful loan client, Paulina’s school venture was deemed too risky. She could not access the finances she needed to secure adequate resources to educate the children properly.

This was just one of many examples that the not-for-profit IDP Foundation, Inc. (IDPF) came across when conducting research into education across Ghana. It inspired the creation of the IDP Rising Schools Program, a ground-breaking education, finance and training initiative that has increased access to low-fee private schools in the country.

20% of children attend private schools

With the launch of the UN Sustainable Development Goals, many countries, including Ghana, increased their commitment to providing free access to quality education without having the infrastructure to do so.

Overcrowding in state schools and a lack of access to schools in rural areas led to the growth of low-fee private schools to meet the burgeoning demand. In Ghana, one in five children attend private schools, rising to 90% in peri-urban areas.

Most operate with little support from government or NGOs. Teachers are often untrained and on low salaries, and many schools have no electricity and exist on undeveloped land, all to keep fees at a level that can be met by poorly paid locals. The school proprietors have neither access to credit nor the financial literacy to improve their operations.

Under the IDP’s Rising Schools Program, proprietors receive business training that enables them both to take out and successfully repay loans which are used to improve their schools.

A network of nearly 600 schools

The program started by implementing financial literacy and school management courses for operators of private schools. The Foundation established an ongoing partnership with Sinapi Aba Trust, Ghana’s largest microfinance provider, training a number of Sinapi Aba’s loan officers to provide the training.

During or after completing the course, participants in the program could access below-market interest loans, provided by Sinapi Aba and financed by the Foundation, to improve their facilities, build additional classrooms, and purchase land or vehicles.

There are now nearly 600 schools within the program, a significant number that has brought its own benefits. Creating a network for the schools has enabled IDPF to aggregate a segmented market. The next step is to bring additional services and benefits to the schools that will help raise standards.

The Foundation has been working to raise the government’s awareness of the role of low-fee private schools in providing quality education to all children, with the ultimate aim of securing their inclusion and implementation in government policy. Improving the accountability of schools for reaching required government standards will act as a platform to future public private partnerships.

Teacher training with Sesame Workshop

In a further extension to the program, IDPF has developed a long-term partnership with Sesame Workshop, the US-based non-profit behind the Sesame Street children’s television program, to develop a teacher-training service for the schools. Through a combination of in-person training, videos, manuals and materials, the Techniques for Effective Teaching Program promotes child-friendly teaching to address the academic, social and emotional needs of children. So far, 90 schools have benefitted in the first phase, with an additional 50 schools signed up for the next.

Following conversations with Ghana’s Ministry of Education and local NGOs, the plan is to scale the outputs of the collaboration and see broader usage of the TFET program, for example, in teacher colleges and public schools.

Over $2.5m in funding and 92% repayment

The IDP Foundation, Inc. collects data on the schools to measure impact. So far, over 510 loans have been disbursed, with a 92% repayment rate. This has enabled the addition of, on average, two classrooms per school, while the overall enrollment rate has increased by 17%.

IDPF gave a three-year, $1.3m grant to pilot and develop the IDP Rising Schools Program. As the program has expanded, this initial grant was followed by loan funding. IDPF is currently working with Sinapi Aba in order to continue scaling the program. It is also in partnership with CapitalPlus Exchange, a US-based non-profit organization that supports financial institutions in the microfinance market in developing countries. CapitalPlus Exchange is researching other financial institutions with which IDPF can work in order to replicate the program.

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