Spotlight on Education: Low Cost Private Schools

Despite significant improvement over the last decade, 67 million primary school-aged children are still out of school worldwide. In the majority of developing countries the quality of education for those that are in school remains unacceptably low, with children acquiring knowledge at only 20 to 25% of the rate achieved by children in richer countries (Global Partnership for Education, 2011). Traditionally international support for education has focused on expanding and improving the public education sector. However, faced with lack of access or poor provision parents have voted with their feet, enrolling children in an emerging class of private sector schools – the Low Cost Private School (LCPS) (Tooley, 2009). Enrolment in the LCPS sector is estimated to make up as much as 30% of primary school places in certain low income countries. Given the increasing prominence of LCPS, any credible, comprehensive plan to improve the education sector in these countries must include support to the LCPS sector. One of the primary constraints on growth and improvement in the LCPS sector is access to finance. Structured correctly, we believe lending to the LCPS sector could rival microfinance as one of the key mechanisms by which international capital markets could support economic development of low and middle income countries.