A few months ago, Luxembourg hosted the 7th European Microfinance Award; a celebration of institutions providing access to education. LMDF supported the nomination of two institutions: the Kashf Foundation in Pakistan, who won the award, and the Fundación Génesis Empresarial in Guatemala. Honourable mention goes to the work of the Opportunity Bank Uganda Limited, the third finalist for the award.
We interviewed Ms Roshaneh Zafar, CEO of the Kashf Foundation in Pakistan, to learn more about the Foundation’s projects which enable children to access a good education.
Conventionally microfinance companies have focused on supporting individual families rather than supporting schools. Why have you chosen such a different approach – supporting schools rather than individual students and their families?
Developing a programme to promote quality education undoubtedly has both supply side and demand side dynamics. Whilst designing our programme, we quickly realised that to liberate children from household chores and burdens and get them in to schools, there must first be an increase in women’s contribution to household income. This is where microfinance came in.
However we also felt that in some ways, our clients’ ability to pay for a better education had improved over the years. Our focus was therefore on improving the supply-side dynamics of education provision. We had already seen that some of our loans had been used by clients to set up small tuition centres in their homes which had later grown into small scale schools.
While we were considering the best action to take, a report was published on the state of education in Pakistan which revealed that 30% of school enrolment was in low cost private schools across Pakistan and that the academic results of these schools were somewhat better than public schools. All these factors made it clearer to us that it was important to develop a better understanding of the financing and other requirements of low cost private schools. In 2012 we examined over 300 low cost private schools and discovered that along with financing, they also had major quality related gaps related to school management, teacher quality, infrastructure and safety.
We therefore developed a holistic approach to improving the capacity of such schools by not only providing them access to finance, but also the skills sorely needed: intensive training on school management aimed at the owners and teacher training programmes. Additionally, we have also developed a financial education curriculum for nursery up to grade 8, which is currently being delivered across the network of 1,000 Kashf supported schools. This has given us the opportunity to prepare children from a very young age to understand good financial practices and also hopefully enable them to become job creators rather than job seekers!!!
Why have you chosen to prioritise education for girls?
There is no doubt today that investing in girls reaps both economic and social benefits in the long term. As is often stated it is simply smart economics. It is important to emphasise that other than in a small number of communities, the demand for girls’ education has grown in Pakistan. The critical factor now is access: distance to schools has become a primary indicator of school retention of girls. Our low cost school model works to counter this as most of these schools are located within communities and have been organically grown.
Another interesting feature we saw within this particular market segment was that over 60% of such schools are run by women, thus offering the twin benefits of education for girls and viable career paths for women. There are of course other cultural challenges that young girls face which make education a challenge, not least of all the general perception that girls are seen as a liability rather than as an asset by the family. However we hope that this perception is also changing.
What operational challenges have you faced operating in Pakistan?
Like any other product the first challenge is really understanding the dynamics of the segment and designing a product that adds value and meets the needs of the client. This was really our first challenge and even now our product is a work in progress and we are learning how to improve overall its features.
The second operational challenge was to train existing staff to leave their comfort zones. The low cost private school client has a different set of demands to those of a female micro-entrepreneur, whilst a different marketing approach and maintenance of a solid credit portfolio is important.
The third challenge was to determine the right operational mix in terms of managing risk and returns. Since our staff had not made such large loans prior to this (our average loan size is $350, as opposed to $1,500 for the school product), we needed to invest a great deal in the capacity of our staff to enable them to assess such loans and also to improve their understanding of the education sector and its needs as a whole.
However, none of these aspects were or are insurmountable, provided one has an eye and ear open to innovation! The other aspect that is challenging is twinning the non-financial aspects with the delivery of financial services and also ensuring that this is sustainable and impactful over time. The role of Kashf’s school development officers has been critical to taking the training aspects of the programme forward, however, there is room to improve, particularly in terms of training content and training delivery.
A final important aspect we included in the programme is the regular checking of the quality of school services through a quality monitoring framework; again this is time intensive and more effective techniques need to be put into place to make this entire process more impactful.
As winner of the 7th European Microfinance Award – what will you do with the EUR 100,000?
As mentioned above, one of the challenges in this programme is to sustain the impact of the school capacity building programme. Keeping this in view, we will be using the funds from the EMA 2016 to innovate further on teacher training along with developing a new curriculum for child well-being and safe guarding. We hope to train teachers to deliver such training to parents and children so that they can be better prepared to deal with child abuse or any other related aspects of child safety. We will be using these funds to pilot and innovate in these areas.