The development of the Program has mirrored the process of venture capitalism in the following way:
- Identify an Opportunity
- Seed Funding
- Add Value
- Bring in Partners (ongoing)
- Expand Further (ongoing)
- Spin Off (ongoing)
IDENTIFY AN OPPORTUNITY
In July 2008, IDP Foundation, Inc. President Irene Pritzker traveled to Ghana to look at various microfinance programs. After meeting several loan clients, she was introduced to Paulina, who owned a school in the Agbogbloshie market in bustling Accra. Although her main business was selling yams, Paulina felt compelled to open a low cost private school in the market to create a safe learning environment for the children of the traders.
There was clearly demand; her school quickly grew to serve over 400 students. Paulina soon needed to reinforce the second story of her building to safely accommodate her growing student body and approached her loan officer for a microloan. Though she had received loans for her yam-selling business, she was unable to secure a loan specifically for her school.
Why is it easier to access credit for a yam-selling business than for improving the educational environment of a school?
After conducting extensive market research, it was clear that Paulina’s story was not unique. Paulina’s school represents one of an estimated 6,000 low cost private schools in Ghana, according to a recent report by IFC. Although low cost private schools are owned by poor proprietors serving low income communities, government and multi- and bi-lateral funding agencies will not support this sector because the schools are privately owned. We created the Program to provide much-needed services to this growing sector.
We provided initial seed funding for the development and implementation of the Pilot stage of the Program. Because of the risk associated with such a novel venture, we decided to provide funding in the form of a grant, with plans to bring in investment partners for the loan portfolio in the future.
In addition to funding, the IDP Foundation, Inc. has added value in a number of ways. We work closely with our microfinance partner, Sinapi Aba Trust, to develop targeted training modules that address the unique needs of school proprietors in Ghana. Topics range from creating financial documents (such as cash flow statements and balance sheets) to school management issues (such as engaging parent-teacher associations and working with district officials). We work with Sesame Workshop to develop teacher training videos addressing pedagogy and activity-based learning techniques to enhance the quality of teaching in the classrooms.
We advocate in the US and internationally on behalf of the low cost private school sector to several stakeholders, including the Ghana Ministry of Education, Ghana Education Service, multilateral and bilateral aid agencies. Our constant efforts resulted in a Stakeholder’s Meeting on the state of public-private partnerships in education, the first ever of its kind in Ghana.
BRING IN PARTNERS, EXPAND FURTHER, SPIN OFF
We are currently in these stages of the process. Please check back for updates soon.