Important Study Adds Insight to the Role of Non-State Education in Meeting the SDG Education Goals

Non-State School South Sudan (Credit: Rod Dubitsky)


· Rod Dubitsky, Executive Director, Financial Inclusion Forum UK

· Kelly Jennings-Robinson, Board Member, Financial Inclusion Forum UK


Education plays a critical role in both the economic development of a country and the economic development of an individual. In 1948, the right to a free, universal basic education was enshrined in the UN Declaration of Human Rights and was reaffirmed and further developed in its 1989 Convention on the Rights of the Child. Both the Millennium Development Goals (MDGs) and the Sustainable Development Goals (SDGs) have committed to the delivery of universal education.

Although significant progress has been achieved since 1948, 258 million children — or one in five children globally — are still out of education, the majority of which live in low-to-middle income countries. For those who do go to school, there is no guarantee that adequate learning is taking place. The World Bank has reported that both literacy and numeracy skills in low income countries fall short of expectations, and, in a recent study, noted that 80% of primary children could not read a simple story upon completion of their compulsory education.

With booming youth and adolescent populations, national governments in low-to-middle income countries (LMICs) face multiple obstacles to deliver their commitments to the 2030 SDG agenda in primary and secondary education, specifically for children from poor and marginalised segments of society. While many LMICs have some of the highest global spends on education in the world, they are still struggling to manage public spending and increase capacity within national systems. Further, the World Bank has estimated that that both domestic and international expenditure needs to rise from $1.7 trillion per annum to $3 trillion per annum (a 117% increase) for children in LMICs to complete primary and secondary school with basic learning by 2030.

It is becoming increasingly clear that the state cannot do it alone.

Non-State Education Filling the gap

Although educational policy and provision have traditionally been the domain of national governments, there has been an increased shift in the number of non-state actors moving in to assist with the access and attainment gaps within developing education systems. In his seminal work, The Beautiful Tree, James Tooley clearly outlined the importance of non-state schools and their ability to aid national governments in the delivery of SDG goals, especially for the poor. And the non-state education market is growing. According to UNESCO’s Institute of Statistics, the global non-state education sector increased from 23.5% share of total education spending in 2005 to 25.4% in 2019. It is estimated to rise to 27.2% by 2025.

Education Finance: A market-based approach

In many LMICs, the non-state sector is composed of affordable non-state schools which are relatively low cost to run and offer an affordable fee option for low-income families who want to send their children to school. They are often run by single, independent education entrepreneurs (edupreneuers) who want to build schools in local communities to provide access, either where the state has not, or provide alternatives to a local government school option.

In a 2020 report, The State of Affordable Non-State School Sector, Opportunity International’s Education Finance (‘Opportunity EduFinance’) group estimates that there is a gap of 66 million seats that could be provided by affordable non-state schools in LMICs over the next five years.

Using education finance as a tool to help fill the gap, Opportunity EduFinance offers solutions to support both the supply side and demand side in the affordable non-state school sector in their countries of operation. Working with local financial institutions across 60 LMICs, they work to create bespoke loans for school owners or education entrepreneurs to expand or improve an existing school for underserved communities. Repayment schedules are structured around a school’s seasonal income from tuition fees. Currently, 14,800 school owners across 43 financial institutions in Africa, Asia and Latin American have been able to access capital to grow their school’s capacity.

On the demand side, Opportunity EduFinance and its financial institution partners also offer school fee loans to rural and low-income families who want to send their children to school but a lack of even small savings or irregular, seasonal income makes it challenging to pay tuition fees or other school expenses at the right time. This often results in high dropout rates or children being sent home from school until fees can be paid. Loans generally range from $100-$250 and can support three children in education for an academic year, thereby minimising the threat of dropouts or interrupted schooling. They estimate that 135,000 families are currently borrowing from financial institution partners in order to send and keep their children in schools.

Opportunity EduFinance estimates the global value of the education financing market is $36 billion dollars across South Asia, Latin America and Sub-Saharan Africa. This breaks down to $10.3 billion market demand for loans to school owners in the affordable non-state school sector and a further $25.7 billion for loans to parents who want to borrow fees for their children’s education. School owner loans can be used to add capacity or to improve the quality of the schools (eg clean water, gendered washroom facilities and play areas). Further, there is growing recognition that “free” state schools often require material fees including for uniforms, books and extra tutoring (shadow education) due to inconsistent teaching quality or over-subscribed classes. Taking out a small loan to finance education — at either state or non-state schools — gives parents more options.

This is not without controversy. Many believe that as a fundamental human right, education should be provided by the state and that market-based solutions do not have a role. Others believe that low fee schools are consistent with the various UN declarations in that they still assist meeting universal education goals in an affordable manner, such as low fee non-state schools. Regardless of belief, the 21st century’s main challenges in education are capacity and quality. The non-state school sector, with the support of financial institutions, do offer a solution.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store