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By Hadiqua Lateefi and Catherine O’Shea

Opportunity EduFinance has been leading a series of virtual discussions with thought leaders from India’s education sector to examine the changing ecosystem for low-cost private schools (LCPS). The webinars build on our recent market research report with KPMG on the changing needs of LCPSs in India. Across the first three sessions, the series has included perspectives from LCPS, education service providers, financial institutions, donors, and technology providers who are rapidly adapting to the changing dynamics of the Indian education ecosystem.

India has the largest number of low-cost private schools  in the world. Today, these LCPS access finance through formal and informal sources to meet their infrastructure, working capital, and other needs. In this blog we will look back on the key learnings from the first three webinars.

WEBINAR 1: Access to Education Finance for Low-Cost Private Schools - What are the opportunities and barriers for education finance in India?

In the first episode of our webinar series, we brought together four LCPS experts to discuss the financing needs of LCPS, how institutions are meeting these needs, and how we can further bridge the gap to ensure financial sustainability and improved school quality. Watch the video here.

What are the barriers and solutions to accessing finance for LCPS in India?

  • A lack of acceptable collateral and legal and governance structures can make it difficult to access finance from commercial funders.
  • School owners have highlighted two key challenges: finding a financial institution willing to lend to them, and then their ability to afford those loans.

Rahul Ahluwahlia Associate Project Director, Governance Central Square Foundation, explained “Having an independent marker of quality is key to driving quality learning outcomes across the sector. And by allowing the sector space to innovate and access more formal credit, we will see it grow and scale like other sectors do."

How can organisations ensure schools and parents receive adequate access to finance to bridge the financing gap exacerbated by Covid-19?

  • Financial institutions should explore different liability structures, co-lending with commercial banks, and alternative sources of funding that reduce the cost of borrowing and help make financing more affordable for LCPS.
  • Financing parents helps ensure the timely payment of school fees, and can get children back into school and improve the sustainability of schools.
  • Financial institutions and impact lenders can go deeper into the LCPS sector and focus on the huge number of schools that have not yet been financed. These include pre-primary schools and rural schools, which are traditionally thought of as higher risk.

Nirav Khambati, Managing Partner for Kaizenvest further explained school financing potential. “There is tremendous opportunity for impact investors to set-up and catalyse access to finance for schools in rural areas that often miss out on financing opportunities due to the location of the school, a lack of acceptable collateral, or its governance structure."

Sandeep Wirkhare, Managing Director & CEO, Indian School Finance Company sees opportunity for impact in the digital space. "Digitize, digitize, digitize! Going digital is the only way an organization can grow and Covid-19 has accelerated this even more. Financial institutions should seek to leverage technology to make financing more accessible for low-cost private schools."

WEBINAR 2: Access to Professional Development for Low-Cost Private Schools: What are the opportunities and barriers for education service providers given the changing ecosystem of Education in India?

LCPS are accessing multiple solutions in the market to improve learner outcomes and quality of teaching in their schools. For the second session of the series, we brought together panelists to discuss professional development needs of LCPS in India, what makes professional development programs impactful, and how we can overcome gaps caused by the changing education eco-system to help schools increase school quality. Watch the video here.

Lavanya Jayaram, Executive Director – South Asia for AVPN highlighted the potential LCPS have. “LCPS are a partner in shaping the youth of our country. They are accessible, affordable, now we need to make them more accountable. One way to do that is to have more integrated solutions that enable schools to build capacities within the teaching force, measure learner outcomes and access training and finance.”

How do we finance the broad education sector?

  • Funds seem to be skewed more towards edtech and not towards areas of greatest need such as addressing learning losses or creating access to professional development.
  • Funding to combat learning loss and for social-emotional learning requires large shifts in government policy. The National Education Policy (NEP 2020) draws Early Childhood Education back into focus, which is also encouraging existing players to focus on building back better schools post covid-19.
  • As schools begin to re-open, they are increasingly looking to supplement school income to meet digital and remediation needs of staff and students. A greater number of schools are registering themselves as trusts in-order to access CSR funding. Professional development service providers have the capacity to support these schools but, they also need funding.

What are the primary needs of schools and school communities?

  • As schools begin to reopen, they are seeing almost 3 years’ worth of learning loss in students.  Learning loss is largely driven by lack of access to online learning during school closures. A key takeaway from this experience is to keep digital learning as simple as possible. The more complicated and layered the technology, the harder it becomes for children to access.
  • There is an opportunity for professional development providers to shift the focus from just delivering trainings to helping school leaders develop a vision for school improvement and to help create benchmarks for school quality improvement.
  • Because funding requires data driven communication, schools are seeing a need to put together data-based outcomes. But there are not any easy data systems for schools to use, particularly around tracking social and emotional learning. This is where education service providers can help schools track outcome related data.
  • While there is some recognition of the importance of partnering with private schools within the policy framework, greater collaboration is required to develop more integrated solutions for schools. One way to achieve this collaboration is to make professional development accessible to low-cost private schools.
  • Women are over-represented in the teaching population, but more men are represented in leadership roles. We need to understand the systematic barriers behind this. A positive step in the right direction is that investors are increasingly taking a whole gender lens approach and leaning towards enabling women led organizations.

Anjali Nambiar, Program Director at Mantra4Change explains the key role that LCPS can play in the overall education ecosystem. “There is a recognition from the public sector that government schools alone cannot cater to all learners. LCPS are a necessary partner to the public education system. They need to work in partnership with the public education system to ensure all learners’ needs are met.”

Azad Oommen, Co-founder, Global Schools Leader further notes, “LCPS are here to stay. We need to create an ecosystem such that the lessons and data coming out of them can be included in systemic discussion on policy and learning outcomes.”

WEBINAR 3: Technology as a key lever of change for low-cost private schools: What are the emerging innovative technology solutions in India?

In the final session of this series, panelists discussed how the needs of LCPS in India have changed given the increased reliance on technology due to COVID-19, the emerging technologies in education finance in India and the strategies technology companies are adopting to ensure their solutions reach the last mile, bridging the digital literacy gap. Watch the video here.

Ritesh Agarwal, AVP, Educational Initiatives Shiksa explained that integrating technology cannot be a one-size-fits-all approach. “The needs and challenges of students attending LCPS are unique and LCPS need to focus on innovation that addresses the contextual and pedagogical needs within their own schools. They need to create a model that works for them and benefits their students instead of replicating models used by high fee private schools.” 

What is the current digital divide in India?

  • As you go further away from the city limits, schools and learners experience lack of connectivity and access to digital devices. Despite the boom in edtech, digital resources have not reached learners based in rural areas.
  • Learners in low-income households are experiencing a financial gap where even though there is adoption of technology, there is insufficient access to it due to lack of affordability by parents.
  • UNICEF reportedthat In India, 42 percent of children between 6-13 years reported not using any type of remote learning during school closures.

How can we use technology to address and overcome impact of COVID-19?

Shiv Vadivelalagan, Co-founder and CEO, ANTHEM explains, “LCPS are affordable and accessible, now we need to focus on making them sustainable and technology is an important partner in doing just that. We need to shift the focus from using technology just for teaching, but also using technology to help run school operations efficiently. Doing so can help schools spend less resources towards back-office management and more towards classroom management.”

  • Technology should be used to deliver content at the appropriate learning level of the child. Content should not be designed as per grade levels, but according to learner levels.
  • There are somethings technology can do better than teachers in both classroom and online settings. Technology is better for diagnostics, and that is helpful to identify the learning gaps and needs, and better to give feedback to students.
  • Technology is not a substitute for teachers. It is a facilitator and a combination of the two is required to address and overcome challenges related to learning loss.

How should tech companies adapt to meet the needs of schools?

  • Technology providers need to work closely with school leaders and provide hand holding support during the initial stages of tech adoption and integration. 
  • When building products for LCPS, tech companies need to be aware of the fundamental requirements of such schools and focus only on core functions (e.g. admission management, payroll management, communications, fee management). Cost of technology should not prohibit the adoption of technology. It should be user friendly and pocket friendly. 

Will adoption of technology continue after schools re-open?

Dr. Kulbhushan Sharma, President of NISA is clear on this question. “Technology is here to stay and so are LCPS. We need to work towards making technology an instrument to deliver quality education in LCPS by making it affordable and easy to access.”

Sakshi Sodhi, Technical Assistance Advisor for Asia, Opportunity EduFinance shares a similar perspective. “Technology is transforming education in India and the various fin-tech and ed-tech solutions fit really well in the education value chain as they can deliver critical outcomes at scale. Now they need to be simple, user friendly and affordable for LCPS.”

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