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Access to FinAnce:ivav Mdl fredua

Issue 3, AprIl 2011

STUDENTFIRST!

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11View point

Doing an RSBY in School

Education in India

13class actTicket JUNAEB, Chile

3centre staGe

Access to Finance:

Innovative Models forEducation

8in person

Q & A with

Michael Latham

7on the spot

What innovations address

a larger need nancingchildren in schools or

nance for edupreneurs?

STUDENTFIRST!

i 3, a 2011

e--c: Parth J Shah

Mgg e: Baishali Bomjan

e: Sujatha Muthayya

c: Shekhar Mittal

p & pb by:

Centre for Civil Society

p pb:A-69, Hauz Khas

New Delhi - 110016, India

Tel: +91 11 26537456 / 26521882

Fax: +91 11 26512347

Dear Reader,

We welcome your feedback, ideas and suggesons. We are also

looking for freelance contributors and columnists. For subscripon

and informaon please contact us at studenirst@ccs.in.

Happy Reading!

School Choice Team

A Fa:ivav Mdl fr

edua

contents

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Finance and education: initiatives and innovations

The recent Annual Status of Education Report (ASER) indicates an increasing migration from governmentschools to private schools. This is indicative of two developmentsa dynamic and fast growing privatesector in education and the exercise of school choice by millions of parents all over India.

The Indian governments education spending has more than doubled in last five years, from Rs 835.64billion in 2004 to Rs 1919.46 billion in 2009. However as a percentage of GDP, state education expendituresdeclined from 3.13% to 2.84%, as the GDP grew even faster. As people became richer with the expandingGDP, they also spent more on education. More than 23% of students in rural India are in private schools(ASER 2010). For urban India, there is no comprehensive survey but many estimate that close to half ofthe students in cities go to private schools. The overall private spending on education has been increasingat a rapid rate and was about 1.2% of GDP in 2009. The private spending is more than filling the gaps inthe state support.

Yet there remain those who cannot afford even the budget private schools. My thoughts turn to Rahul, whothree years ago went to a private school through a privately sponsored school voucher program. Whenthe project ended, so did Rahuls hopes for a better education at a private schoolbudget or otherwise.Recognising this need for access to finance for education, companies such as Equitas and GrowingOpportunity Finance Ltd are supporting parents through the provision of affordable education loans.

The other side of the story is that of edupreneursthose brave souls who do not have well endowed familytrusts but are committed to serving the cause of education by running their own schools, big and small,urban and rural. Their current attempts at obtaining mainstream finance have been met by discouragingresponses, ranging from no formal loan policies for schools/education sector to refusal based on lack ofcollateral.

Access to financefor parents and edupreneurs alikehas become inextricably linked to access toeducation today. To meet these needs, innovation and entrepreneurship have once again come to therescue.

And that is where this issue of SFM focuses: Stories of innovative models that have increased access tofinance for school education. We showcase three models that target different aspects of the finance gap ineducation provision and access:

TheIndianSchoolFinanceCompany,whichprovidesloanstoedupreneursofbudgetprivateschools;

TicketJunaebfromChile,whichlooksatSchoolVouchersforchildren;and

FoodforEducationProgramfromBangladesh,whichprovidesfreemonthlyrationofriceorwheattopoor families if their children attend primary school.

ExpertssuchasMichaelLatham,RegionalAdvisorSouthAsia,CfBTEducationServices,AmitavVirmani,CountryDirector,AbsoluteReturnforKids,andArunDuggal,Chairman,SriramCapitalLtdandatrusteeofCCSweighinonthiscrucialissuewiththeirthoughts.

We hope this issue gets you thinking about a pivotal issue in education access and equity,and help steer us in the direction of more financial innovations, so all students in India canenjoy the right to education of choice!

1 student first!

ParthJShahEditor-in-Chief

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Private school explosion in India isshedding new light on development.It has long been assumed that theprimary responsibility for educating

all children in India lies with thestate.YettheWorldBankestimates27% of all Indian children enrolledin schools are being privatelyeducated. Even low-income familiesare turning to private providersand despite the lack of empiricalevidence, it is estimated that aburgeoning layer of 3,00,000budget private schools functioningat a cost as low as Rs 70-350tuition fee per month, today cater

to over 20 million children in thecountry. Of course many of themare located in unplanned coloniesand slums inhabited by low-incomefamilies. A closer look at the historiclegislation of the Right to EducationAct (RTE Act) and you will witnesspitfalls for these schools whichare almost always unknown to theaffluent elite and almost alwaysundermined and shunned by thegovernment.

Two norms that these schools will

find difficult to meet accordingto Section 19 of the RTE Act arebuilt-up floor area and teacherssalaries; private primary schools

need to have a minimum 800 sqmetres of built-up area and payteachers at par with governmentschools in which the entry levelmonthly remuneration (as perthe Sixth Pay Commission) is Rs23,000. The only option for thesebudget private schools is thereforeto acquire enough finances toupgrade their schools by 2013 orface dire consequences of shuttingdown.

Regardless of the emphasis onthe robust relationship betweenfinancial depth and economicdevelopment, evidence that linksbroader access to financial servicesespecially by small and microenterprises in the education sectorin India has been very limited. At atime when financial inclusion shouldbe the buzzword to ensure thatthere are enough good schools for

our children and encourage moreedupreneurship, the scenario is

rather grim. Individuals and smallenterprises need to rely on theirpersonal resources to invest in theeducation sector to take advantage

of promising growth opportunities.This financial exclusion is especiallybinding on the talented poor whooften lack collateral, credit histories,financial literacy and connectionsthereby leading to persistentinequality and slower growth.

Credit is not theonly or inmanycases the priority financial servicethe poor need: good savings andpayments, good products and

tools, services and insurance mayrank higher. Building inclusivefinancial systems requires a focusbroader than micro-finance:transparency mechanisms, goodlegal infrastructure and betterinformation are also essential. Wehave compiled some of the bestfinancial practices, models andtools from around the world whichcould perhaps offer India innovativepublic policy interventions to

address challenges abundant in theeducation sector.

A F a:

iva v Mdl fr edua

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3 student first!

efy

cr f opr:Dominican Republic (Latin Americaand the Caribbean); Ghana

(Africa)www.edify.org

Formerly known as Eduleap, Edify,a non-profit organisation registeredin the US provides small businessloans and trainings to affordableprivateChristianschoolseducatingimpoverished children in Africa.These schools charge a monthlytuition fees in the range of $5-15and offer a good alternative to

public schooling especially for thepoor. They are focused on deliveringfourkeyresourcestohelpChristianedupreneurs lift their communitiesout of poverty:

1. Capital to expand facilitiesat affordable private Christianschools, thereby increasing accesstoeducationforthepoor;2. Programs to strengthen schoolsChristianmessageandwitness;

3. Business training for edupre-neurs to improve the management,efficiency, and profitability of theirschools;and4. Curriculum, tools, and teachertraining to advance the quality ofeducation, from entrepreneurshiptraining to technology to English.

How does this work? Edify makesinterest-free loans to lendinginstitutions in the country. Their

localloanofficersidentifyChristianschools, analyze the cash flow ofschools, make loans, and collect

repayments. The local lendinginstitution charges interest on theloans to cover their costs relatedto making and collecting the loan.Take a classroom with 35 studentseach paying US$7.50 per month.The revenue from each classroomis US$262. Given that a teacher is

often paid about US$80 per month,the remaining US$182 representsfunds available for the bookkeeper,the janitor, the proprietor andmaking payments on a loan.Edify typically funds schools thatalready have 4 to 6 classroomsthat are owned free and clear. Theproprietor has more than sufficientcash flow to service a loan that willbuild several more classrooms,build a computer lab, or buy a

used bus to transport more childrento the school. The incremental costof adding an additional classroom

i shl F

cmpy (isFc)

cry f opr: India(Asia)www.isfc.in

ISFC is a Hyderabad-based non-

to an existing school is as little asUS$5,000. Such a classroom canaccommodate up to 40 additionalstudents. A school proprietor isloaned the US$5,000 in kind (inconstruction materials) in tranchesuntil the construction is completed.Proprietors are able to repay their

loan to Edifys partner lendinginstitution because their studentsare paying tuition. The lendinginstitution recycles this money toanother school proprietor, who isable to build another classroomand educate even more children.This way, schools do not remainreliant on outside funding andparents hold school proprietorsdirectly responsible for the qualityof the education their children are

receiving.

banking finance company (NBFC)which extends medium term loans atmarket rates to private schools whichfall in the monthly average studentfee range of Rs 250-600 (US$5-12).School borrowers must meet creditand collateral requirements and

be able to demonstrate the projectmanagement skills needed to use

and repay borrowed loan capitaleffectively. Average loan sizes areabout Rs 12 lakh (US$24,000) andare used primarily for infrastructureinvestment which allows an increasein enrolment, increases schoolrevenue and ability to repay loan

obligations.

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ISFC provides financing to thelow-cost private schools and theproduct features and processes aredesigned specifically to meet schoolrequirements. ISFC loans can beused towards capacity expansionby building new classrooms and

adding facilities in the schools toimprove quality. They offer threetypes of loans:

1. Term Loans secured by propertyfor amounts Rs 5 Lakh and abovewith a tenor of 12-60 months (EMIbased payments in schools that arerecognised till class 10 and has astudent count of more than 400.2. Xpress Loan which is unsecured,

for amounts Rs 1-5 Lakh with 6-60months tenor (EMI based payments)in schools which are recognised till

Grwg oppryF L

cry f opr: India(Asia)www.gopportunity.net

Growing Opportunity improvesthe lives of the poor throughtransformational microfinance,education in business and socialdevelopment. The loan amountranges between Rs 3,000- 25,000(US$60-510) which clients will repayover a period of six to 12 months.Before receiving their first loan,a client will receive four sessionsof orientation training includingbusiness planning and information

aboutloanrepayments.TheClientRelationship Officer (CRO) willassess each of their business anddetermine how much each clientcan afford to confidently repay.The client will then form a groupconsisting of 12 to 20 members.Beforejoiningagroupeachclientagrees to guarantee the loan ofothers in the group, hence thegroup is called a Trust Group. If oneclient cannot make the repayment

that week, the other client will repaythe amount. Clients make loanrepayments on a weekly, fortnightly

class 7 with a minimum studentcount of 300.3. Short Term Loan (STL) for existingcustomers with excellent paymentrecord where the amount is basedon requirement with a 1-6 monthstenor where repayment will be

bullet payment of principal at theend of tenor and monthly interests.

or monthly basis at the groupmeeting.

A Growing Opportunity CRO willmeet with the group each weekto impart new skills relating totheir business (such as marketing,customer relationships, productdiversification, etc.) or socialissues (such as disease prevention,nutrition, improving self-confidence,

helping your local community etc).They also collaborate with otherorganisations such as PreventionofViolenceatVictimCare(PCVC)

to provide specialised trainingand connections as needed by ourclients.

Their education loan is aimed atwomen who want to give theirchildren a better education. It wasoften seen that during May andJune,manyoftheirclientsstruggledto pay annual school fees. Theeducation loan therefore allowed

their clients not only to meet theirschool repayments, but in manycases allows them to send theirchildren to better schools.

Fl Ky

cry f opr: Kenya(Africa)www.faulukenya.com

Faulu Kenya is a Deposit Taking

Micro-FinanceCompany,registeredinKenyaundertheMicro-FinanceActandisregulatedbytheCentralBank

ofKenya.Fauluwasfoundedasaprogramme of Food for the HungryInternational(FHI),aChristianreliefand development organisationbased in Phoenix Arizona in USAand has grown to become an MFIthat offers both savings and credit

services to millions of Kenyans.FHI recognised that there wereunique needs of low-income

people in rural and urban areas forsustainable economic developmentforthemarginalised.FauluKenyahas grown tremendously over thelast 16 years, with over 90 outletsthroughout Kenya. These outletsare currently serving over 3,50,000

clients. Among their clients areaffordable private schools cateringto middle to low income families.

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5 student first!

enaBLe aRK & ccsshl a

vhr Prgrmmcry f opr: India(Asia)

Absolute Returns for Kids (ARK)work in Delhi has identified manycommunities where children arefacing multiple social and economicchallenges which put them at greatrisk of being excluded, droppingout of school or never attendingschool. East Delhi is one sucharea. To address this need ARKhaspartneredwithCentreforCivilSociety (CCS), pioneers of SchoolChoice reform in Indiawho havepiloted the countrys first voucherpilots (Delhi Voucher Project andSchool Vouchers for Girls) toimplementENABLE(EnsureAccessto Better Learning Experiences),a school access and voucherprogramme for underprivileged

children in Shahdara (North Eastand East Delhi).

TheENABLEprogrammelaunchedin 2011 provides 815 children anopportunity to access quality low costprivate school education by fundingtheir education for five years.Eligible children are aged between5 and 7, and are either currentlyout of school, in governmentschools or attending unrecognisedlow cost private schools, and comefrom low income families (earningless than Rs 1,00,000 a year).1,776 eligible children applied forthe programme out of which 815were selected though a randomisedlottery within each cluster (groupof wards). 105 schools have beenempanelled. ENABLE provides upto Rs 7,300 funding per studentannually and cover annual tuitionfee up to Rs 4,800, books worth Rs900, uniform for Rs 600 and mealsfor 1,000. A marginal increase yearon year will be provided based on

inflation.

The Right to Education (RTE) Actmandates private recognisedschools to admit and integrate25% of their class 1 entry with chil-dren from disadvantaged groupsandweakersectionsofsociety.Byfunding up to 900 such children inShahdara,ARKisbuildingamodelfor school access and a platform toadvocate systematic implementa-tion of the RTE Act.

School vouchers will be provided tofamilies for each component andthey will be able to avail them attheir chosen school and affiliateduniform shops, book shops andlocal kirana shops. ARK andCCSare working in partnership withEdenred, an international voucherservice provider operating in40 countries, to provide securevouchers to families and paymentto schools and affiliates.

Kz Pr eqyLLc

cry f opr: India

(Asia)

Kaizen Private Equity LLC is anapproximately US$80 million singlesector private equity fund dedicatedto investments in the educationsector in India. The target fundsize is capped at US$100 million

with over 50% of the investmentexpected from institutional investors.The Fund aims to provide capitalfinancing to education companiesin their growth stage and will focuson operational improvements in its

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portfoliocompanies.Kaizenwillbethe first education sector-specificprivate equity fund in India. TheFund will be incorporated under thelaws of Mauritius as a public limitedliability company.

The investment manager is Monterey

Capital Management (MCM) andinvestment advisors to the Fundare Kaizen Management AdvisoryPrivateLimited(KMA).InternationalFinance Corporation (IFC) isproposing an equity investment intheFund.IFCscommitmentwouldact at a stamp of approval andplay a catalytic role in attracting

investmentstoKaizenandthesector.IFCwillcontribute to internationalbest practices in the corporategovernance and structure of theFund. Also, through participationintheAdvisoryCommittee,IFCwillshare its global expertise, resourcesand knowledge on the education

sector to build capacity at theportfolio company level.

The project is expected to have ahigh development impact in thefollowing areas: Provision of long-term equitycapital to institutions in theeducation sector value chain and

thus increasing access to educationin India. This type of funding is notreadily available in the market. Operational improvements toportfolio companies in the educationsector in India through the valueadd role of the Managers. This willimprove the quality and sustainability

of education sector institutions inIndia and make them more attractiveto strategic investors. Demonstration of successfulprivate equity investments in anunderserved sector, thereby buildingconfidence amongst institutionalinvestors to invest in India and thesector.

F fr e

Prgrm

cry f opr:Bangladesh

The Government of Bangladesh(GOB) launched the innovativeFood for Education (FFE) programin 1993. The FFE program providesa free monthly ration of rice orwheat to poor families if theirchildren attend primary school.The FFE program uses a two-steptargeting mechanism. First, two tothree unions that are economicallybackward and have a low literacyrate are selected from each of the460 rural thanas. The programcovers all government, registerednongovernment, community (low-cost), and satellite primary schools,and one Ebtedayee Madrasa(religion-based primary school)in these selected unions. Second,within each union, householdswith primary-school-age childrenbecome eligible for FFE benefitsif they meet at least one of thefollowing four targeting criteria: A landless or near-landlesshousehold that owns less than halfanacreofland; Thehouseholdheadsprincipaloccupationisdaylaborer; The head of household is afemale (widowed, separated fromhusband, divorced, or having adisabledhusband);or

The household earns its living

from low-income professions(such as, fishing, pottery, weaving,blacksmithing, and cobbling).

A household that meets the targetingcriteria, but that is covered undertheVulnerableGroupDevelopment(VGD) program or the RuralMaintenance Program (RMP) orany other targeted interventionprogram, is not eligible to receiveFFE food grains.

If a household is selected toparticipate in the FFE program, it isentitled to receive a maximum freeration of 20 kilograms of wheat or16 kilograms of rice per month forsending its children to a primaryschool. If a household has only oneprimary school-age child (6-10years) who attends school, then thathousehold is entitled to receive 15kilograms of wheat or 12 kilograms

of rice per month. To be eligiblefor 20 kilograms of wheat or 16kilograms of rice, a household isrequired to send more than onechild, and all primary-school-agechildren, to school. The enrolledchildren must attend 85 percentof total classes in a month to beeligible for the wheat entitlementin that month. Thus, the total wheatallotment to a school may varyfrom month to month, depending

on the variation in the number ofstudents who meet the attendancerequirement.

To improve educational quality in

FFE schools, the GOB imposed anumber of additional requirementsfor the schools to qualify forprogram participation. SchoolsaregradedbyA,B,C,and D classification (A being thehighest and D being the lowest) onthe basis of certain performancecriteria. FFE food grain allocationis withheld for the D-grade schoolsuntil these schools attain theacceptable performance level.

At least10percentofgrade5students must qualify for the annualscholarship examination. Schoolsmustholdtheprescribedannual examination. Students ingrades 3, 4, and 5 should obtain at least 40percent of total points in theprevious years annual examinationto receive FFE rations. The FFE ration is suspendedfor any school in which a random

inspection reveals less than 60percent attendance, until theattendance record improves.

The program addresses long-termpoverty and development of humanresources as well as short-termneeds for increased access to food aswell as significantly raised primaryschool enrolment by 9 percentagepoints and has been particularlyeffectiveinBangladesh.

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7 student first!

aRun duGGaLChairman,SriramCapitalLtd.

Attracting private capital to support edupreneurs is the paramount need to enhance the quality and spread of educationin the low cost schools catering to low income families. Financing children in school is best left to the parents, who willsave and/or borrow to make sure their children get the best education possible, particularly, in English medium schools.They see this education as the most important investment in their families future. However, it is a long-term investment

and cannot be structured as a short-term education loan.

Edupreneurs, on the other hand, need short term loans to finance construction of additional class rooms, upgradefacilities and for working capital of schools. They generally have excellent domain knowledge as former teachers orschool principals. What they lack is capital. If short or medium loans can be made available to them by the bankingsectororNBFCsbasedonthesecurityofthepropertyorfuturecashflowoftheschool,thecapacityoftheselowcostschoolscanbeincreasedenormously.TheRBIshouldalsogranttheseloansPrioritySectorLendingstatusasthereisnogreater priority than providing better quality education to children from low income families.

aMitav viRManiCountryDirector,AbsoluteReturnforKids

Financing children vs schools helps empower parents to make informed choices. Once empowered, parentsare expected to make decisions which will have a direct impact on their childs education. If parents are giventhis freedom to choose, we should see an overall improvement in the quality of schools and hence educationaloutcomes overtime. The lesser performing schools should eventually get weeded out of the system.

Financing edupreneurs is equally important so that they too can bring innovations to the classroom. TypicallyedupreneurscateringtotheBOPsegmentareunabletochargeahighenoughfeetogenerateasurplus.Financingor soft loan provisions provided to these edupreneurs will allow them to upgrade, not only, infrastructural needs,

but to also introduce state of the art data driven pedagogic interventions.

PRaKasH nedunGadiDirector Development, The Teacher Foundation

Innovations in both areas- financing children in schools and finance for edupreneurs are vital to address themost important area of focus for us in India, the development of human capital! However, in reality of oursituation in the country, where the efforts of the government are good, but not enough, financing of edupreneurs

seems more critical. Successful edupreneurs are innovators and by financing them, you encourage them toconstantly apply innovative solutions to solve existing problems sustainably. Financing children in schools on theother hand may not necessarily solve problems in a sustainable manner.

Wha va addr a largr dfag hldr hl r fa fr duprur?

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Q.Brieflydescribeyourproject inIndia? A. We have seven projects inIndia out of which two are specificto access to finance. VidyaChaitanyam or the Self Help GroupPartnership in Education Project(SHG PEP) is a project funded by

the Department for InternationalDevelopment (DfID)UKunder the

Q & A wh

Mhal LahamMichael Latham is a man who wears many hats:hestartedhiscareerfirstasateacherinCanada,

MalaysiaandBruneiDarussalamandovertheyearsmoved on to become a consultant and trainer withseveral bilateral and multilateral agencies worldwideincludingtheEU,WorldBankandtheDepartmentforInternational Development (DfID). His main focus areais conducting research, providing consultancy andoverseeing operations that involve the developmentand delivery of complementary models of education.He also regularly presents papers and conductstraining in the field of Public Private Partnerships in

Education.

Since2009LathamhasbeenbasedastheRegionalAdvisorSouthAsiafortheCfBT(Centrefor British Teachers)Education Trust. In this role he leadsa number of researchprojectsprimarily in the delivery of basic education to underserved populations, advises various stategovernments on strategies for meeting the challenges of Education for All as well as managestheIndianoperationsofCfBTEducationServices(India)andtheCfBTEducationResourceManagement (Pvt) Ltd. Excerpt from an interview.

BYBAISHALIBOMJAN

Civil Society Challenge Fund forthe period 2008-2012. It aims tosupport the government of AndhraPradesh in facilitating access to andenabling monitoring of high-qualityeducation service delivery using arights-based marketing strategy.This project creates awareness about

educational rights among womenself help groups and children, trains

women to conduct communityself assessment in public schoolsthrough the School ManagementCommittees, establishes MandalEducation Resource Centres(MERCs) and disburses fundingthrough the Mandal Samakyasfor the SHGs to own and operate

their own education and trainingoperations.

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9 student first!

in person

Enabling Quality ImprovementProgramme (EQUIP) was a pilotproject from 2004 - 2008 in whichCfBTESassistedHSBCinprovidingloans (half a million US dollars) tosmall private education enterprisesin Andhra Pradesh and Tamil Nadu

which catered to the very poor. 44schools accessed these loans (uptoUS $16,500) over a tenure periodof four years. All 44 schools paidtheir loans and have been able toimprove their infrastructure whichclearly demonstrates that this modelcan be a viable business propositionfor the rest of India as well as otherregions with similar shortfalls infinancing. Consecutively with thisfinance facility was the provision

of technical assistance and schoolimprovement services to theseschools that was funded by theHSBCEducationFoundation.

Q. What have been your challengesas well as opportunities in India?A. I still think we are dealing witha sector that is ripe for change andinnovation. The challenge I think isthat we are operating in a system

which has on one hand publicschools and on the other privateschools. These are only two modelsplaying in the field, neither of which,in their current guise is equippedto provide quality education andaccess to adequate financialresources. We need a three leggedstool, market based educationservices that have different financialand social returns, financialvehicles that guarantee longer

and lower returns compensatedand measured by social gains.

Traditional commercial returns asand of themselves - will not workand what we need today are newlevels of innovation to come upwith a better education matrix.Finance companies and banksneed assistance from education

resource companies to help themto both understand the specificprivate sector basic educationneeds as well as to identify suitableborrowers. Moreover, in most APS teachers are underpaid andundervalued which in turn directlyaffects quality so the challengeremains in coming up with an allround school improvement modelthat enables access to financealongside the provision of quality

audit and school improvementservices.

Q. With limited data available howcan one identify how best borrowerslook like? A. How do you measure thesesmall enterprises? You need tolook at financial and educationindicators. First obviously, thereis the calculation of the running

cost of the school and studentsrequired to meet the minimumstandards this identifies the abilityof borrowers to repay any loan.Secondly, the enrolment rate andhistory of the school is anotherindicator. Thirdly, (and this is purelysubjective!) I would suspect femaleedupreneurs will make the bestborrowers.

We had a control group external

review of our EQUIP project. All44 borrowers paid back their

loans, there has been markedimprovement in their schoolinfrastructure and 34 have comeback for a second loan.

Q. Just how limited is financialaccess in the Indian educationsector?A. I still havent heard of one successstory with regards to accessingfinance. The big boys have noproblem; they are bringing downfeelevelsandscalingfaster.ButtheAPS is at a cusp, between traditionalmicro-credit and small and mediumenterprise and I havent seen any

loan model functioning here. Thesituation is critical. Globally too thescenarioisdim.IknowofIFCbutcant think of any mono educationfunder. There arent any funders inIndia because primary education isthe responsibility of the state. Fortertiary education there are manyprivate universities and there isaccess to student loans. The bigproblem therefore I see is at thecritical secondary education level

the vital bridge between primaryand secondary where there is atidal wave of students waiting towalk across yet there is a lackof resources both financial andhuman in the public or privatesector spheres to meet this bulge.

Q. What are the reforms necessarytoday for APS especially in the lightof the RTE Act?

A. I am not convinced that anyonereally knows how the RTE Act is go-ing to pan out in reality. If we lookinto the future we should re-exam-ine the definition of a good school,parameters for trained teachersand reengineer how we deliver ed-ucation. The pressures currently inmotion are primarily input focussed- how big are the classrooms, isthere a library and playground,what is the pupil-student ratio.

What is required is a radical rethinkof what defines a school, what de-

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fines the competencies of a teacher,and how will schooling be deliveredover the next decade? As professionals we need to bethinking more creatively about ouranswers to the following two keychallenges: How do we make real ahigh level vision of classical liberal

education whilst retaining a firmemphasis on academic attainment?And how can we institute the masscustomisation of school how canwe change the design of the servicein direct response to an individualstudents needs without incurringsignificant additional costs inthe production or delivery of theservice?

Q. Which are some of the innovativeand successful programs or modelsin India?A. Gyan Shala Program: Locatedin the urban slums in Ahmedabad,Gyan Shala presents a uniquemodel of mass education tolow income group families at amoderate cost through centresknown as Gyan Shalas (Gyanwhich means knowledge or wisdomand Shala which means school).

Most Gyan Shalas are single roomcentres replete with all the resourcestypically found in a regularclassroom environment and thesecentres serve as classrooms for aparticular age group of childrenfrom the local neighbourhood. Theyare part of a larger school systemwith centres spread across severalslums of Ahmedabad and centrallymanaged by a team of experts whoform the think tank. Each centreis a classroom and no centre hasall the grades under one commonroof. There are two types ofShalasor centres the primaryShalas for

grades 1 to 3, the middle Shalasfor grades 4 to 7, and the upper

Shalas for grades 8-10. The centresoperate in two shifts morning andafternoon. A distinctive feature ofGyan Shala is re-engineering therole of a traditional school teacher inthe roles of four level functionaries,

namely the class teacher, senior-teacher, junior and senior designteam, that double up as teachertrainers. This feature allows theGyan Shala teachers, who havelimited formal qualification andno specialised teacher training, tocontribute to highly effective classroom experience for the children,leading to high learning outcomes.

Punjab Education Foundation(PEF): PEF delivers two innovativeinitiatives- the Foundation AssistedSchools (FAS) programme, whichpays low-fee private schools amonthly subsidy up to a maximumof Rs 350 per month for elementaryclasses and Rs 400 for secondaryclasses as tuition fees and related/allied charges. This financialassistance is linked with thesatisfactory performance of the

schools in the Quality AssuranceTest (QAT) which is administeredtwice a year and is the critical chiefdeterminant for continuation in theprogram.

The second complementary initiativewhich is aimed at improvingteaching in these FAS low-feeprivate schools is the ContinuousProfessional Development Program(CPDP). Under the CPDP premieracademic institutions and leadingNon-Governmental Organisations(NGOs) in the field of professionaldevelopment and capacity building

are selected through competitionto design and deliver ClusterBased Training (CBT) workshopsfor teachers with a focus onbuilding their content knowledge inMathematics, English and Science.

Q. What is the business model

going forward? A. Recent years have seen anexpansion and broadening of theprivate sectors role in the financingand provision of education servicesin many countries. A key trendhas been the emergence of moresophisticated forms of non-stateinvolvement in education throughPPPs. These PPPs bring togetherthe public sector, business and civilsociety in a manner that is differentfrom the traditional method ofpublic sector provision. Partnershipsare not privatisation, but a meansto promote improvements in thefinancing and provision of servicesfrom both the public and privatesectors but not to increase the roleof one over the other as well as toimprove existing services providedby both sectors with an emphasisdirected on system efficiency,

effectiveness, quality, equity andaccountability. PPPs involve both thepublic and private sectors workingtogether to achieve importanteducational, social and economicobjectives. Alas the acronym PPPis a semantic minefield where thereis still little agreement about whatconstitutes a PPP or how they aredefined. But for me it is a threelegged stool comprising the publicsector, the private for and not forprofit sector and perhaps mostcritically from an accountabilityperspective - civil society.

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11 student first!

A little over three years ago, thegovernment took up an ambitiousand challenging project ofproviding free health care to allBelow Poverty Line (BPL) familiesacross India (around 44 million ofthem). The Ministry of Labour andEmployment launched the RashtriyaSwasthya Bima Yojana (RSBY), a

national health insurance schemein October 2007.

How does the RSBY work? Thecentral government funds 75% of thescheme and the state governmentsfund the balance 25%. The stategovernments are responsible forimplementation. The governmentpays an annual premium of aboutRs400-500perBPLhouseholdtoaninsurance company, which ensures

healthcare and hospitalisationcover up to Rs 30,000 per familyper year. Healthcare is available tothe beneficiaries at any of 5,600empanelled private hospitals and2,500 public hospitals acrossIndia. More hospitals continue tobe empanelled and these hospitalsare required to meet a basic set ofguidelines to become empanelledhospitals.

Having decided to provide free

healthcaretoallBPLfamilies,thegovernment did not think aboutsetting up and running hospitalsall across the country. If it haddecided to set up new hospitalsacross India, a huge amount ofmoney would have been requiredfor capital expenditure on settingup the hospitals, besides hiring

all the doctors, nurses and othersupporting staff. An annual budgetto run all these hospitals wouldneed to be allocated and theresponsibility of administering andmanaging these hospitals wouldhave fallen on the government.All this would have taken time andby the time the infrastructure wasbuilt and made operational, manypeople would have been deniedthe much needed health care for a

couple of decades. The governmentwisely chose to focus on outcomesrather than inputs and only fundedthehealthcareforallBPLfamilies.It did not take on the responsibilityfor the deliveryofhealthcare.Bypaying a premium per household toan insurance company, which itselfmay be either a government ownedor a private insurance company,it made the insurance companies

responsible and accountable forthe administration and delivery of

health care.

The insurance companies havetied up with existing governmentand private hospitals across thecountry to provide free health caretoall the BPL families.Manynewprivate hospitals are now likely tocome up, especially in the rural

areas where there are a largenumber of BPL families. The BPLbeneficiaries are free to go to anyhospital of their choice anywhere inIndia in terms of their own prioritiesof quality, accessibility, convenienceor whatever else matters to them.

Over23millionBPLfamilieshavealready been covered under theRSBY in a little over three yearstime a truly amazing achievement

in terms of scale, cost andtimelines. Today, the government isconsidering extending this schemeto the entire population.

That is the kind of approach neededif we are to provide quality educationfor every single child in the countryin a time-bound manner. There isa simple equivalence presentedbelowbetweentheRSBYmodeland

how a similar model could work inthe education context.

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BYKSATYANARAYAN,Director,NewHorizonMedia.

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12..

Hlhr RsBY Ml elmry e

Costs shared by centre and states,with the latter being responsible forimplementation.

Costssharedbycentreandstates,withthelatterbeingresponsiblefor implementation.

The government funds healthcare for all

BPL families and refrains from buildingthousands of new hospitals.

The government funds school education for every single child

allocates a specific amount per child and refrains from buildingand running thousands of new schools.

Insurance companies bid for the contractfor each district in the country.

New entities called Third Party Administrators (TPAs) bid toadminister the scheme in each block.

The government pays an insurance premiumto the insurance company that wins the bidafter a beneficiary is enrolled.

The government pays an amount per child to the TPA onpresentation of confirmation of the childs enrollment andattendance in a school.

The insurance company is charged withdistributing a smart card to each beneficiarywith all the biometric data of the beneficiaryembedded in the smart card.

The TPA is charged with distributing a smart card for each

child to the childs parents with all biometric details of the childembedded in the smart card.

BPL families choose to go to any of theempanelled hospitals including bothgovernment and private hospitals and onlyneed to present their smart card.

Parents choose to send their child to any of the empanelledschools including both government and private schools and onlyneed to present the childs smart card at the school. Attendancewill be logged through biometric means.

The empanelled hospitals present a claimto the insurance company for healthcareprovided to the beneficiaries and gets

paid by the insurance company afterverification.

The schools provide a list of children enrolled along with theirsmart card details to the TPA who will verify the details and pay

schools the amount allocated per child by the government.

To cover their costs, the insurance companiesget to keep the premium income left overafter settlement of all the claims from thehospitals.

To cover their costs, the TPAs get to keep 2% of the amountallocated per child by the government for every child enrolledin the school.

The insurance companies providecomprehensive data to the government onthe number of beneficiaries enrolled, claimspresented, claims paid and percentage of

the local population covered.

The TPAs provide comprehensive data to the government on thenumber of children enrolled in school, the attendance rates, thetest scores, infrastructure available in schools and other relevantdata on a monthly/quarterly basis.

AnRSBY-typeschemeineducationwill put purchasing power in thehandsof the BPL families. Privateentities will respond to this by settingup new schools in areas with largenumberofBPLfamiliestoprovidequality education to all children.

The government may also chooseto set up a few schools in regionswhere the private sector doesntventure quickly enough.

If the RSBY has reached over 23million families in just three years

time, it is time to consider a similarscheme in the education sectorto help us reach out to over 200million children and ensure everyone of them gets access to qualityeducation within the next 10 years.

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13 student first!

JUNAEB, Junta Nacional deAuxilio y Becas, established in1964 is a government organisationoperating in the education sector.The main objective of the institutionis to fulfill and manage resourcesfor young Chileans in vulnerableconditions, to enter, stay andgraduate successfully in as per theChilean educational system. OneofthebenefitsdeliveredbyJUNAEBisBAES,ScholarshipFoodprogramfor Higher Education, which wascreated in 2005 and provides foodto students that belong to I and IIquintile of per capita income perhousehold. It is a complementaryscholarship granted along withother benefits provided by the

State

Intheearly90swiththeChileanEducational Reform, the fullschool day began in educationalestablishments, resulted in anincrease in demand for foodgrants and scholarships. Hence, in1990 and 2000, the budget wasdoubled with over a million grants(scholarships).

JUNAEB began to outsourcetheir software by partnering withprivate sector players resulting inoperational efficiency. One of thesealliances was made in 2007, withEdenred, a company that took theresponsibility and commitment todevise social development throughthis program.

Edenred, previously known as Accor

Services, is the world leader in

tk JUnAeB, chlprepaid service vouchers with over50 years of experience in corporateand public benefits operatingout of 40 countries worldwide. InIndia, Edenred partners over 3500organizations with a wide rangeof innovative Work-life Benefits,Rewards and Loyalty Solutions.

At first, the delivery of foodscholarship for students pursuinghigher education was through theTicket Restaurant meal vouchers.Having favorable results it becameimperative for Edenred to devisenew ways of distribution that arecomfortable and easy to use. Hence

in 2010, smart cards , wereintroduced into the program owingto the technological advancementsworld over. The process of migrationfrom paper to card was made in2010, gradually. However, 100%migration took place by the monthof October 2010.

Ticket Restaurant cards are deliveredto 1,02,000 beneficiary studentsunder the program. Every card isloaded with US$ 52 per month thatcan be used in an affiliate networkof 2,644 affiliates which includesrestaurants and supermarkets ofthe university. Edenred arranged

BYMARTAMANRIQUEZ,GerentedeProductosBenefits,Edenred,Chile

class act

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for special healthy meals with theiraffiliate network through healthymenus exclusively for JUNAEBstudents.

The JUNAEB electronic card hasmultiple advantages as compared

to the ticket restaurant mealvoucher. Most important of whichis the increased safety and securityfeatures, There is a unique pin foreach card and the same can beblocked online. Also the amountis automatically reloaded on thecard each month diminishingall the logistical and distributionhassles and expenses. In addition,these transactions can be done as

per exact amount and the cardcan be swiped for the same. Easyto monitor, supervise and tracktransactions conducted at affiliatedestablishments offering healthyfood at affordable prices to thebeneficiaries.

Variousvalueaddedserviceshavebeen developed for the schoolmanagement. For example,telephonic assistance programsand email helpdesks for queriesrelated to card usage have beensetup.

The philosophy for this program isbased on 3 things influencing the

academic performance of a student(supply, good sleep and sports). Thesupply is important for developmentof the daily activities of the students,giving energy and nutrients. Ahealthy supply eliminates the risk ofhaving chronic, non transmissible

diseases in the future. Along withgood supply it is important to havegood sleep and indulge in sportsactivities.

The alliance formed by JUNAEBand Edenred has been successfulhaving good quality dedicatedservices motivating us to continueour relationship and constantlyupdate our service levels.

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Your one stop information portal to trackRTE legislation and implementation relatednews, analysis, and commentary.

Lets ensure that every child gets his

fundamental right to education.

J h Rte cl!

Email to info@righttoeducation.in

www.rgh.

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School Choice Campaign

Centre for Civil SocietyA-69, Hauz Khas, New Delhi - 110 016.Phone: +91 11 2653-7456 / 2652-1882, Fax: +91 11 2651-2347

Email: schoolchoice@ccs.in

www.schoolchoice.in | www.ccs.in