Aid drops for education, shows microfinance is needed

Comfort grew up in a fishing community on Ghana’s sunny Atlantic Ocean coast. Most people worked with fisheries, but Comfort wanted to teach.

She began by teaching three children on her front porch. And when she told her family she was going to start a school, they asked her: “Hey Mum, are you sure that you can do it?”

Today, Comfort runs an academy with 800 children and 40 teachers plus a nursery school next door. To get there, she took a microloan from Ghana’s Opportunity Bank.

This first loan, when she had about 200 students, was for 20,000 Cedis (US$ 5,380), which she used to expand and renovate the school.

“So we now have a multistory building for the entire school. And we have 23 classrooms,” her daughter, Priscilla, said. And 90 percent of local children now attend the school. “It has really changed lives.”

Keen to learn more, Opportunity EduFinance did an in-depth study of the project and were fascinated by what they found.

“Number one – we saw massive job creation,” says Nathan Byrd, Head of Opportunity EduFinance in the interview that he, Comfort, and Priscilla did with BBC Radio Two. New teachers came to work at the school, new businesses set up all around the school, such as bakers and coffee shops.

“We saw the school become this economic engine.”

Meanwhile, the school saw its students reach Ghana’s best universities, while some have made it to international universities.

“It is really stunning,” says Nathan, who told the BBC when asked that the loan had indeed been paid back and that repayment rates on Opportunity EduFinance loans are roughly 99 percent.

Getting to these high repayment rates has been a long process of trial and error. Opportunity EduFinance have gathered a tremendous amount of data, using the more than 10 million data points to analyse their work and find better ways to do it.

“It has been this painstaking process of lending and not getting the money back and figuring out what we can do better the next time,” he says. “Now we have a tremendous amount of understanding.”

The only non-profit providing microfinance for education at a global level, Opportunity EduFinance allows people like Comfort and Priscilla to transform the lives of children.

“Everybody knows how powerful education is,” says Nathan. “There are some wonderful people doing wonderful things in the world.”