Opportunity International, a nonprofit microfinance organization founded in 1971 by Al Whittaker and David Bussau, announced at the Clinton Global Initiative’s Fifth Annual Meeting that it will expand its Banking on Education program to five additional countries over the next 24 months. Opportunity will commit USD 10 million to its education finance program, which provides loans for entrepreneurs to open schools in poor areas where it is difficult for children, particularly girls, to access public schools [1, 2]. Opportunity reaches over one million clients globally with products including loans, insurance and technical services. As of December 2008, it had USD 799 million in assets [3]. To view the 2008 Annual Report, see [4] in the bibliography.
Opportunity currently invests in over 200 private schools in five countries, with loans ranging from USD 500 to USD 25,000 for terms of two to five years. The program reached over 8,000 children in 2007, its first year of operation [5]. Opportunity aims to improve educational opportunities for up to 250,000 children by 2012.
In addition to providing loans to entrepreneurs to start and expand schools, Opportunity offers interest-bearing tuition savings accounts and school fee loans for parents who cannot afford their children’s education. School fee payments are flexible and the account assets are guaranteed if the child loses his/her guardians. “The pilot program at Opportunity Uganda currently provides almost 4,800 school fee loans, ranging between $22 and $214 and payable in four-month terms” [1].
In a five-year study comparing “schools for the poor” in India, China, Nigeria, Kenya and Ghana with government schools, Dr. James Tooley, Professor of Education Policy at Newcastle University, observed that schools for the poor were superior to government schools. Not only are they more cost efficient, they “offer flexible payment options, leading to reduced drop out rates in tough financial times. Most microschools are located in close proximity to poor households. This makes parents feel secure about sending their daughters to schools and also helps them save on transportation costs” [5].
Opportunity International operates in 28 countries through 43 microfinance institutions. It raises funds from charitable contributions, government grants and debt and equity from third parties [6].
By: Stefanie Rubin, Research Assistant
Bibliography:
[1] Opportunity International: History: http://www.opportunity.org/Page.aspx?pid=780
[2] Tickertech.com: “Opportunity International´s CGI Commitment Provides Tuition Savings Account and School Fee Loans for Children Living in Poverty.”, http://www.tickertech.com/cgi/?a=news&ticker=a&w=&story=200909200909231445PR_NEWS_USPR_____DC79731
[3] Opportunity International Highlights: http://www.opportunity.org/Page.aspx?pid=781
[4] Opportunity International 2008 Annual Report: http://www.opportunity.org/Page.aspx?pid=855
[5] Mehta, Vibha, Microfinance Insights: “Microschools: Small Investment, Large Returns.”, https://www.microfinanceinsights.com/articles_new.asp?member=nonmembers&id=377
[6] Opportunity International FAQ: http://www.opportunity.org/Page.aspx?pid=783
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