An American nonprofit that specialises in micro-financing services for the developing world is piloting a new “sustainable” scholarship model in Rwanda.

Opportunity International, a non-profit organisation providing small business loans, savings, insurance, and training to more than 12 million people in poverty, has so far helped 83 children through school with this new scholarship model.

New data from the UNESCO Institute for Statistics (UIS) shows that the global number of children and adolescents currently not in school continues to grow.

According to UIS data for the school year ending in 2013, 124 million young people between the ages of 6 and 15 had either dropped out of school or had never started in the first place. That is an increase of 2 million on the figure for 2011.

Via UNESCO Institute for Statistics Database

Nathan Byrd, Head of Education and Finance at Opportunity International, provides strategic direction and leadership for Opportunity International’s education finance programme. His aim is to forge crucial partnerships within the education sector, and oversee the global Education and Finance Business unit, which already includes nine product and service lines across 10 financial institutions in nine different countries, and an impressive, active portfolio impact of more than 700,000 children.

He says: “We launched the new model in May this year to get kids in school who otherwise would have been kicked out for not paying.

“In our first year, we have provided funding for 83 parents whose children were about to be kicked out of school, or whose commitment to paying for their children’s education was severely damaging their business.”

Nathan says that the conventional model for education funding often completely disregards the families that are most deprived due to the fact that they simply do not have access to these opportunities.

Via Opportunity International.

“Our aim is to overthrow the assumptions behind the traditional ‘all-or-nothing’ funding model which doesn’t always reach the people most in need. This system is often open to whoever is lucky enough to have access to these opportunities – sometimes as simple as reading an ad– and doesn’t necessarily respond to the core need or keep the family involved.

“We want to reach into the sector of need that otherwise wouldn’t have the exposure and present opportunity to these kids who otherwise wouldn’t have access.

“Through the careful selection of these children and their parents, we can keep the kids in school and they will leave with an education, while their parents can maintain their business and remain engaged in and responsible for their children’s education.”

The UIS research demonstrates that the number of children across the world who were not enrolled in primary school increased by 2.4 million between 2010 and 2013, bringing the total to 59 million.

According to the same data, one out of 11- or 9 percent- of children between the ages of 6 and 11- continue to be denied the right to an education despite an international campaign to get every child in school by 2015.

For 40 years, Opportunity International has provided the tools people in impoverished nations need to forge a better future for their families and communities.

The new scholarship model has been piloting in Rwanda since May, and has made a very real difference to the lives of 83 children and their families. Opportunity International’s model employs a data-driven approach to more accurately determine the size of the scholarship by comparing household income with the school’s educational costs.

Population: 12 million
Population living below poverty line: 44.9%
Life expectancy: 58.85 years
HIV prevalence: 2.9%
Literacy rate: 71.1%

Via Opportunity International.

This new approach to funding reflects family cash-flow and prevents the cost of school fees from eating into parents’ ability to produce income, and in the long-term, empowers them to pay increasing shares of their educational expenses as the scholarship is phased out after two or three years.

Opportunity International uses a unique collection of data and careful qualifying standards to select which families are most in need of the scholarship.

“No matter how much we wish we could change it, there is obviously more need than support available. When you think that we are connected with 1100 schools, and each has at least 250 students, that means there are 275,000 ‘needy’ children to choose from. We are already indirectly supporting all of these children.

“In order to cut this number down we need to identify the top end of need, and there are a number of ways that we do this.

“Firstly, we seek a proprietor recommendation. The schools know the situation of all these children, they can tell us ‘this person is a person in need’ or ‘these parents can pay and these parents can’t’. Ultimately, the children whose parents can’t pay are not going to get through school.

“Once we have identified the children in need, the schools can tell us which parents can make partial payments- if a family has no income, unfortunately this model is not going to help them.

“At this stage, we begin to look at the child’s academic performance. If the child is performing well academically but their parents are struggling to pay, we need to do whatever it takes to keep that child in school.

“Older children at lower grade levels will get priority over younger children who qualify. For example, if you have a 6 year old and a 9 year old in the same grade class, the 9 year old has to take priority. Females must also take priority.”

The Opportunity International website states that of the near 130 million young people not in school worldwide, 70 percent are girls; if a girl does not complete secondary school she is at a much higher risk of illiteracy, HIV and early marriage. There is also little to no chance that she will ever reach her full potential.

Via Interrate.

Nathan says: “Through this scholarship, we are empowering families and enabling them to sustain themselves.

“Asking for a proprietor recommendation and basic binary data on academics greatly reduces the potential for harm to the children as we are accessing just enough information and putting it into a simple, but extremely effective model. It is clever because it still takes advantage of the “big” data but does so in a responsible way.

 “We tell parents up front that our intervention is both partial and temporary, and we spell out for them the actual numbers, because the more you reassure them that you are presenting them with a solution, rather than just “free money”, the more likely it is that they will pay the money back; it’s about structuring a model according to an attitude of affordability, not breaking down their willingness to pay through an all-in hand out.

“I just want to make it clear that this model is far from perfect, but we genuinely believe that we are tinkering with something that could be a powerful solution to the faults of the traditional scholarship model in some cases, and a powerful accompaniment to it in others.

“With a little creativity, intelligence and real knowledge of the markets, we have begun to create something that is sustainable and has the potential to be universal.”

Opportunity International’s scholarship scheme has seen tremendous success in Rwanda, and plans are in place to extend funding to even further next year with the model due to be piloted in Ghana and Uganda. If these schemes run as successfully as the first, it could be the start of a funding evolution that will support students across the world.

Could this be the future for educational funding, and if so, are we on the cusp of a truly accessible global education?

Image via Shutterstock.

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