Ms. Kousar Parveen is a widow and passionate ‘edupreneur’ – a common term for private school owners - in Multan, Pakistan. She defied societal norms by opening and running M.A Public Girls High School in a community where managing a business is considered a man's job. Established in 1998, her school provides quality education to economically challenged students, and the school’s income supports her own household.

After five years into her career as a teacher, Ms. Kousar became aware of the local schooling system's shortcomings and decided to start her own school. Despite limited resources and societal prejudices related to women business owners, she sustained and grew her school over the past 24 years. Her story of successfully expanding access to education for girls in her community despite the challenges of gender disparities exemplifies what Taleem Finance aims to address through innovative and inclusive financing approaches.

Taleem Finance is one of the pioneering institutions in Pakistan focused exclusively on education financing. Taleem Finance knows many stories like Ms. Kousar and her school, and recognizes the critical need for specialized education financing options to unlock the potential of edupreneurs to help meet the education access needs in their communities.  The institution’s mission is to fill this financing gap and address the unique challenges faced by the education sector in Pakistan using gender-centric approach.

Central to Taleem Finance's success has been its strategic partnerships, which includes Opportunity International EduFinance. Through this collaboration, the EduFinance Technical Assistance Facility team has provided essential support, including the development of tailored financial products, innovative credit scoring models, and guidance on seamless integration of these offerings into Taleem’s core operations.

Understanding the complex landscape of the education sector in Pakistan and issues of equity, Taleem Finance and EduFinance are focused on pushing beyond traditional finance to test innovative approaches that incentivize more equitable education access.

Navigating Challenges During COVID-19

Taleem Finance launched operations in July 2020, amidst the peak of the COVID-19 pandemic. The education sector in Pakistan faced severe setbacks during this time, with nearly half of the 26 million children enrolled in schools before lockdown dropping out due to economic pressures of the crisis. The pandemic exacerbated existing issues, particularly affecting girls’ education with an estimated 60% of dropouts comprised by girls, as families prioritized boys’ education due to financial constraints. Taleem Finance’s resilience during this period highlighted its commitment to sustaining education despite unprecedented challenges.

To date, Taleem has made nearly 500 school improvement loans to non-state school owners to invest in things such as adding more classrooms, washrooms and classroom resources, and 1,000 school fee loans to families with school aged children. EduFinance estimates these investments to date have benefited over 98,000 learners in Pakistan. 

Partnering for EduFinance Technical Assistance

Taleem Finance’s success launching as a dedicated education finance institution is partly attributed to its strategic partnerships, where Opportunity EduFinance has played a key role in providing technical assistance. Our EduFinance Technical Assistance team specifically supported Taleem Finance with 3 workstreams:

1. Product Development and Refinement: The team guided Taleem Finance in developing and refining their education financing products, ensuring they met the unique needs of the education sector. This involved tailoring loan products to address the specific requirements of non-state schools and educational institutions, such as infrastructure improvement financing and technology enhancement, such as ICT labs.
   
   
2. Credit Scoring Models: EduFinance assisted in creating specialized credit scoring models that includes quantitative indicators (such as financial stability and historical repayment behavior) and psychometric assessments (evaluating borrowers' attitudes and behavior towards credit). These models help in accurately assessing the creditworthiness of potential borrowers in the education sector, reducing risks for both the institution and the borrowers.
   
   
3. Integration with Core Loan Products: By providing technical guidance tointegrate these refined EduFinance products and credit models into Taleem Finance's core loan offerings, the team helped ensure seamless and efficient lending operations. This integration also aimed at improving the accessibility and affordability of education loans for borrowing school owners and parents.

A Gender-Centric Approach to School Financing

Taleem Finance has introduced a gender-centric approach to its loan products, recognizing the significant barriers faced by female educators and learners. The Gender-Centric School Improvement Loan targets women school owners and includes the following criteria:

• Female School Ownership: At least 40% of the school owners who receive loans should be women. This ensures that women in leadership positions within the education sector receive the support they need to sustain and grow their schools.

• Girls' Enrolment: Schools receiving these loans must have at least 30% of their learner population comprised of girls. This requirement aims to address gender disparities in education and ensure that more girls have access to quality education.

• Co-education: In their commitment to gender equality, Taleem Finance does not finance male-only educational institutions; instead, all financed institutions are co-educational.

• Female Staff: Financed schools have a majority female staff, with 80% of teachers being women. To further support these educators, the company offers subsidized teacher training and is actively seeking grants to enhance the professional development and certification of female teachers, fostering their capacity to pursue and advance in teaching careers.

Taleem Finance is also holding itself accountable to a gender-centric approach by striving to achieve a better gender balance within its own workforce, with a current target of 30% female representation, particularly at the head office level.

By focusing on female empowerment, Taleem Finance hopes to create more inclusive educational environments for all learners, and support the growth of women-led educational institutions. The gender-centric approach is expected to have a ripple effect, promoting gender equality not just in education but also in broader societal contexts.

Digital Innovation for EduFinance Borrowers

One of Taleem Finance’s key innovations is the development of a school management platform designed to streamline fee reconciliation and manage other financial transactions within the education ecosystem. This platform is aimed at improving operational efficiency for schools and ensuring better financial management. By enabling schools to manage their finances more effectively, Taleem Finance is helping them become more sustainable and capable of delivering quality education.

Another digital initiative aims at addressing the financial access barriers faced in part by female educators and students needing an easy-to-access, efficient loan application process. The Taleem Connect app is a customer-facing mobile application designed to streamline loan applications and enable clients to monitor their progress and relationship with Taleem Finance effortlessly. This app allows for loan applications of up to PKR 50,000 (USD 180) without lengthy processes, utilizing existing customer data to expedite approvals. Additionally, all staff members undergo bi-annual certification in education financing, ensuring they provide high-quality customer assessments and maintain a stable loan portfolio.

Potential Outcomes

The World Bank estimates there are about 2 million more girls than boys out of school across Pakistan, with 26 percent of girls versus 19 percent of boys never attending school at all. And with current trends, it estimates it will take 50 years to enroll school-aged girls and 31 years to enroll all boys in school.

This data makes clear that more investment in education – including state and non-state schools – and innovative approaches to incentivize equitable access for learners is critically needed in Pakistan. Taleem’s inclusive school financing approach, combined with their other innovations to support sustainable schools has the potential to generate significant positive outcomes:

• By ensuring a minimum percentage of girls are enrolled in financed non-state schools, Taleem Finance is promoting increased focus on gender equality in education and linking gender disaggregated learner data to financing, which is often omitted in traditional financing and social impact investing models.
  
  
• By setting a measurable target for a gender balanced school improvement loan portfolio, Taleem is setting an institutional culture of accountability that requires ongoing identification of any lending barriers women school owners may face to successfully grow a profitable school portfolio. Staff incentives and ongoing training are aligned to this goal, blending the social impact and business cases and avoiding the common mistake of financial institutions that set a social impact goal without properly incentivizing staff to achieve it.  

• Taleem’s school management platform offering and refined loan products are expected to enhance the operational efficiency and financial stability of schools over time. Schools better able to track school fee income, manage finances to pay teachers timely, and create budgets with longer time horizons for more strategic school improvement planning are more likely to provide higher-quality education and build resilience to withstand future crises and continue serving their school communities.  

Taleem Finance’s model demonstrates that focused education financing with a gender-centric approach is possible in markets like Pakistan. By addressing financial barriers for school owners and parents, and supporting both boy and girl learners, Taleem Finance is paving the way for a more educated and equitable future in Pakistan.

 

Read more about EduFinance's Technical Assistance partnership with Pursue through workshops held in Western Kenya here!