What We Do Explaining Our Mission
Creating a route out of poverty through access to education
Education is one of the most effective routes to exit poverty. If we want to reduce poverty and inequality around the world, we must increase access to quality education. Education also contributes to better health, to gender equality, and to peace and stability.
Despite some impressive progress, however, as a global community we are still failing our children. In 2013, some 59 million children were still out of school and 250 million could not read or write1,2. These numbers continue to grow as populations rise throughout the developing world.
The reasons for this are varied and complex, though a significant portion of this gap comes down to resources. Schools need buildings, books, and teachers. Parents need money to pay for school fees, uniforms, lunches and associated costs. Teachers need classroom tools, professional development, and on-time salaries. But governments in developing countries are simply not able to raise enough taxes to cover these resource demands in education. Even when they do, that money does not always get to education. And donors cannot cover all the gaps. The UN’s Global Education Monitoring Report recently estimated that aid levels would need to increase seven-fold to achieve universal access to education – a clearly untenable, and certainly unsustainable figure without private sector investment.
A new approach to education and development
Opportunity EduFinance is pioneering new solutions by lending small amounts of money to large numbers of schools and parents, while designing savings and insurance solutions specially tailored to plug the gaps in the pathway to educational access, quality and completion. Demand for these services is high and 99% of loans are repaid. Because the loans are repaid, the money can be used again and again, so our work is extremely cost effective both in terms of a development intervention and as financial product.
It is also very efficient. Opportunity EduFinance loans do not pass through central government or any education ministries. They go directly to where they are needed: the schools, the parents, the teachers, and the communities. And while we work hard to keep our costs down, we make no profit from this work.
Opportunity EduFinance – building on the microfinance expertise of Opportunity International
That is because Opportunity EduFinance is a group within Opportunity International, a non-profit organisation offering microfinance to some of the world’s poorest and most marginalised people since 1971. Today, Opportunity International serves 12 million hardworking entrepreneurs in 24 countries around the world.
This work has traditionally focused on entrepreneurs in the broadest sense of the word, including individual farmers or traders. To maximise its social impact, Opportunity International established Opportunity EduFinance to focus expertise on the education sector and scale up operations with donors, impact investors and financial institutions. Today, OI has EduFinance projects in Africa, Central America, and populous Asian countries such as India and the Philippines.
The case for Low Cost Private Education (LCPE) – acting now to meet demand for education in the developing world
Opportunity EduFinance also lends to parents, who want to ensure that their children do not miss a day of school. These parents attend both government and low-cost private schools. We recognise that low cost private education is controversial for some and we will be glad to step back from our work when governments around the world are willing and able to educate all their children. In the meantime, we have a moral duty to help educate children around the world by growing the number and quality of seats in classroom available within some of the world’s most challenge economic environments. Without this help, taken immediately to sufficient scale, millions more children will miss the opportunity to reach their full potential.
Innovative use of data and technology to increase access and help schools improve quality
The demand for EduFinance products and services is so high that Opportunity EduFinance is innovating to find new ways of reaching large numbers of schools, parents, and children. Mobile technology, especially in Africa, looks promising. Our approach empowers grassroot success rather than imposing a generic format for school administration or curricula, ensuring that scale supports and encourages localized education and educational innovation. By supporting parents and independent schools, our singular objective is to enable people to lift themselves out of poverty and disadvantage. We impose no religious or ideological agenda.
Opportunity EduFinance is also focusing its efforts to improve the quality of schools. Experience from the field suggests that low cost private education often offers a better quality education than government-run schools, because low cost private schools are directly accountable to fee-paying parents in a way that government schools are not. But as our programmes grow, Opportunity EduFinance is allocating more time, effort, and other resources to the issue of quality while also developing practical, effective means of monitoring and evaluation of progress.
EduFinance: the most efficient and cost-effective way to channel finance to large numbers of schools all around the world.
These are still early days for our work, but our results already demonstrate the huge potential for microfinance in education. In the absence of fully-functioning education ministries, microfinance is simply the most efficient and cost-effective way to channel finance to large numbers of schools all around the world. It may have a key role to play in correcting worldwide failure to provide effective education at sufficient scale.
As we attract more investment to the sector, our work will be even more transformative. By showing how our work is commercially viable, we incentivise more banks and finance institutions to offer EduFinance services. The private sector will inevitably be a part of the solution to today’s education crisis if we are to bring the necessary resources to meet the challenge.Opportunity EduFinance: collaborating with donors, impact investors and education experts.
Opportunity EduFinance is of interest to donors, impact investors, and education experts who want the provision of quality education to reach the necessary scale at a pace that will ensure the human rights of today’s children are respected. Indeed, more and more long-term and impact investors now invest in education for the developing world. Opportunity EduFinance collaborates with all those who share this aim. We must educate our children, and we cannot simply wait for generational change: the need is today.
- Education Overview, World Bank, last updated 22 September 2015,
- World Bank numbers are taken from key messages issued by UNESCO and the Education For All Global Monitoring Report: “A growing number of children and adolescents are out of school as aid fails to meet the mark.”
- unesco.org - “Latest Aid Figures Show Support to Education Falls Again”
- “About us” - Opportunity International website