school finance pacts

SCHOOL FINANCE

Progressive Action CommitmentsProgressive Action Commitments‐ A Global, Sectoral Approach to Transforming Lives

Indian School Finance Co.

Progressive Action CommitmentsProgressive Action Commitments‐ A Global, Sectoral Approach to Transforming Lives

Current Issue that affects Affordable Private Schools (APS)(APS) 

f d lAccess to Finance – a fundamental requirement

Below the radar for most finance companies

Growth and improvement plans of schools get hamperedGrowth and improvement plans of schools get hampered

Quality improvement initiatives and upgrades come with a lag

School Solution Providers – focused on upper end schools only

T h i i d f h hTeacher training – need of the hour

Opportunity for imPACT according to ISFCOpportunity for imPACT according to ISFC

ISFC i t t D ti Q lit Ed tiISFC exists to Democratize Quality Education

Help schools bring a revolution in their schools through

Access to finance on easy terms from a dependable company

Expose the School Solution Providers to the APS opportunity to get customized products delivered

F lli ith th b t i l i t b i hi hForge alliances with the best in class companies to bring higher standards within the APS community

ISFC’s PACT:Winning PartnershipsISFC s PACT: Winning Partnerships

PACT  Description

Activity:  Finance to schoolsCountry Impacted: India

Target : $5 mn portfolio by March 2011; 300 schools impacted; at least 4 alliances that help improve quality at schools

PACT  Details

PACT Goal Seed ne gro thPACT Goal:     Seed new growth

Focus Area: Finance to schoolsDuration:  Less than 6 months

I t

Priyadarshini SchoolImpact

Before After ISFC Loan

Increment % Increment

Loan Amount: Rs 1,200,000 (USD 24,000)

Loan Increment

No. of Students 534 621 87 16%No. of Teachers 16 20 4 25%Average Monthly Fee  Rs. 285 ($ 5.7) Rs.358 ($ 7.16) Rs.100($ 2) 25%

No. of Classrooms 8 21 13 163% 6

Satya Sai Vidya Niketan High schoolImpactImpactImpact

Loan Amount: Rs 1,000,000 (USD 20,000)

Before After ISFC Loan Increment % Increment

No. of Students 1,389 1800 411 30%

No. of Teachers 46 55 9 20%

Average Monthly Fee  Rs. 430 ($ 8.6)  Rs.530( $ 10.6) Rs.100($ 2) 26%

No. of Classrooms 8 25 17 213% 7

Thank YouThank You

Sinapi Aba Trustp

Progressive Action CommitmentsProgressive Action Commitments‐ A Global, Sectoral Approach to Transforming Lives

Current Issue that affects APS –Cash Flow Challenges

• Low‐income private schools have very limited cash flows (in addition to small budgets) ( g )

• Profitability vs Liquidity• Profitability vs. Liquidity 

Opportunity for imPACTOpportunity for imPACT

• Train school proprietors in financial p pmanagement, including cash flow, budgeting /forecasting, etc. / g,

• Develop improved methods of collecting school revenues (fees)school revenues (fees) 

• Provide schools loans to address their cash flows (IDPRS working capital loans)flows (IDPRS working capital loans) 

OUR PACT: Improved Cash FlowOUR PACT: Improved Cash Flow

PACT  Description

Activity:  IDPRS Proprietor Training and Loans 

Country(s) Impacted: Ghana 

Target : 120 proprietors trained and receive loans (average loan size $2,000) 

PACT  Details

PACT Goal Impro ed Cash FloPACT Goal:     Improved Cash Flow 

Focus Area: Improved School Finance, and school development 

Duration: 2 yearsDuration:  2 years 

Additional Information

Hold proprietor trainings in 3 Regions of Ghana for 120 school proprietors in 2 yearsHold proprietor trainings in 3 Regions of Ghana for 120 school proprietors in 2 years. Afterwards, scale up throughout the country to reach more than 1,500 schools in all 10 Regions in 4 years. 

Proprietor Training and Loan Photos

Trident MicrofinanceTrident MicrofinanceProgressive Action CommitmentsProgressive Action Commitments

‐ A Global, Sectoral Approach to Transforming Lives

Key Sectoral Issuesy

• Schools lack physical infrastructure – room, roof,Schools lack physical infrastructure  room, roof, toilets, computers, furniture…

• Schools would like to improve infrastructure, but…p ,

• Ignored by banks and other formal financial institutions due to perceptions of poor p p pcreditworthiness.

• Lack of effective ways to signal quality – rating is not popular yet.

Trident’s Objective:j

– To provide affordable finance to affordable schools!p

– Easily accessible – simple terms, doorstep service so that schools can concentrate on their job: teaching students!

– Low interest rates and easy collateral requirements

– Based on a study of the school’s educational outcomes and managementand management

Our PACT:h h h dReaching the Unreached

Activity: Providing credit to budget schoolsy g g

Country: India

Target: 80 schools and Rs 20 million outstanding by March 2011

Goal: To provide affordable finance to affordable private schoolsschools

Focus Area: Enabling growth of APS in rural and urban areas.

Duration: 5 months

Achievement So Far:Achievement So Far:

Schools: 14Schools: 14

Students: 10,400

i b d 3 00 000Disbursed: Rs 3,400,000

Interested? Contact us:Interested? Contact us:

For loans: 09963554744For loans: 09963554744

For other details:kishorepuli@tridentmicrofin comkishorepuli@tridentmicrofin.com

prasanthregy@tridentmicrofin.com

Thank you!!!Thank you!!!

FAULU Kenyay

Progressive Action CommitmentsProgressive Action Commitments‐A Global, Sectoral Approach to Transforming Lives

Faulu Kenya DTM VisionVisionGiving Kenyans hope and a future

Mission:To  listen and empower Kenyans by providing relevant financial solutions

Profile:• Second largest MFI in Kenya with 20 years service to the poor in Kenya• 1st MFI to be regulated to take deposits (June 2009)• 300,000 clients across Kenya; 3.5 Billion outstanding loans

91 k ti ffi• 91 marketing offices• 24 banking branches• 900 staff• Products – Savings and LoanProducts  Savings and Loan

Business Model:Loans to Solidarity groups  – Grameeny g pLoans to Salaried individuals ‐ check‐off loansSavings  ‐ Personal and business banking

Current Issue that affects APS in Kenyay

1. Access to finance to support operations and development

2. Financial products tailored to meet their specific needs• Loan appraisal• Loan appraisal

• Cost

• Repayment terms

3. Access to affordable advisory services• Capacity building to improve operations

• Modeling to enhance impact (teaching, learning and impact on the community)

• Infrustructure and learning improvements

• Expansion business planning and project management

Opportunity for imPACTOpportunity for imPACT

1. Research to quantify and qualify gaps and challenges the APS schools are facing

2 W k ith fi i l i tit ti t l it th t it2. Work with financial institution to exploit the opportunity for tailoring specific products for APS• Savings products

• Loan products

• Savings & Loan

3. Advisory services provision to improve  their operations

OUR PACT: New seed growthOUR PACT: New seed growth

PACT  Description

Activity                         :  ResearchCountry(s) Impacted  : KenyaTarget                            : 4  top MFIs

PACT  Details

PACT Goal :

•Establish how many APS are their client portfolios

•Establish what products and services they are providing

•Establish appetite for structuring specific products for the target groupEstablish appetite for structuring specific products for the target group

•Establish challenges in providing financing facilities to target group

Focus Area: Opportunities for increased outreach of MFIs to APSFocus Area: Opportunities for increased outreach of MFIs to APS

Duration:  :          6 – 9 months

OUR PACT: Product DevelopmentOUR PACT: Product Development

PACT  Description

Activity                         :  Product DevelopmentCountry(s) Impacted  : KenyaTarget                            : 4  products – Savings and Loan

PACT  Details

PACT Goal : Increase access to financial services to APSPACT Goal :            Increase access to financial services to APS

Focus Area: :         Capacity building loans and working capital facilities 

Duration:  :          3 – 6 months

INDUSTRY PACTSINDUSTRY PACTS

• Develop and Publish Sector Benchmarks• Develop and Publish Sector Benchmarks

• Create a network of stakeholders to assist schools to access capital  

d land ensure quality

• Develop & promote forums at every stakeholder level so that all 

stakeholders can support one another

• A commitment by school lenders towards increasing school quality