Sharing of big data to enable investment in education
Starting in Uganda, sharing of big data to enable
investment in education
(369
words)
LONDON, 13 June 17 – Millions more children
could end up getting an education, when Opportunity
International (OI) shares its experience and data on
education microfinance, enabling others to invest in
education.
With 263 million children out of school, banks
and other financial institutions have been reluctant to lend
into developing countries’ education because – in their
view – of the small margins and high risks.
But with
backing from philanthropists, donors, and impact investors,
OI’s EduFinance (OEF) programme has been running counter
to this trend, helping children to access affordable private
education by lending to schools and to parents. To date, it
has helped 2 million children access quality
education.
The non-profit organization currently works
with 12 microfinance institutions in ten countries and its
education loan portfolio is growing rapidly, almost
quadrupling since the end of 2012. It now wants to
accelerate this progress by working with more financial
institutions.
“We want to be an industry catalyst for
affordable education, and to be truly transformational we
need to persuade more players to invest into this sector,”
said Nathan Byrd, who runs the OEF programme.
“That is
why we are planning to share the enormous amounts of data
that we have gathered, helping others to measure risk
extremely accurately and to reduce that risk almost to
zero,” he said.
At the end of March 2017, the OEF total
active portfolio consisted of nearly 45,000 loans worth just
over US$21.4 million and benefitting nearly 450,000
children. Repayment rates on its loans are more than 99
percent.
“In a very real sense, we are filling the
‘missing middle’ by which medium-sized financial
institutions fail to lend into this market, put off by small
margins and government regulation,” he said.
“This is
a major market failure, which we simply have to correct,”
he said. “Education holds the keys to poverty reduction
for literally millions of families around the
world.”
At the end of 2016 OEF was given grant funding
to build the first open-platform credit model for education
lending, developed initially for Uganda. The platform will
offer automated credit algorithms, so that others can
minimize the risks of lending into the education sector,
allowing banks to go rapidly and effectively to scale with
their education lending.
[ENDS]
NOTE TO
EDITORS:
• 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 education, which also contributes to
better health, political stability, and economic growth.
Despite this, some 263 million children are currently out of
school. The reasons for this are complex, but they are at
least partly about a lack of resources. Governments and
donors are unable to cover all the gaps.
• Opportunity
International (OI) (http://opportunity.org.uk/) is a
non-profit microfinance organization, working in the
education sector since 2007, pioneering new solutions
through its education microfinance programme, known as
EduFinance (OEF) (http://edufinance.org/).
• OEF
currently works with 12 microfinance institutions in ten
countries, channeling small amounts of money to large
numbers of schools and parents. These loans allow schools to
build more capacity and teach more children. Loans also
allow parents to send their children to low cost private
schools.
• Demand for these services is high. Since
taking this work to scale in 2013, OEF has impacted more
than 2 million children in ten countries so far (http://edufinance.org/news/2017/education-finance-reaches-2-million-children).
• Microfinance
is efficient and effective. It could also be transformative.
(http://edufinance.org/blog/2017/05/g7-statement-education-needs-more-resources-microfinance-can-help)
• In
the long-run, OEF aims to demonstrate that microfinance can
be commercially self-sustaining and therefore to attract
more private money to the sector. By attracting more private
money to the sector, it will help to close the funding
gap.
• As a non-profit organisation, OEF’s singular
objective is to enable people to lift themselves out of
poverty and disadvantage. OI does not impose any religious
or ideological agenda.
• Nathan Byrd joined OI in May
2012. Prior to that, he directed operations for the
International Rescue Committee in Kabul, Afghanistan, where
he was responsible for a budget of US$21.5 million. A US
citizen, he studied at the Thunderbird School of Global
Management, Indiana University, Saint Louis University, and
the Cornell University College of Engineering (http://edufinance.org/who-we-are/edufinance-team/nathan-byrd).