Gray Matters Capital Foundation
Affordable Private School Initiative
School Finance Facility School Finance Facility Background While Affordable Private Schools (APSs) tend to expand with time, growth has been slow, fueled only by the reinvestment of school profits. Access to finance, particularly infrastructure loans, will allow schools to expand their operations. Existing financial institutions are either unaware of the lending opportunity or unsure of the repayment risks that APSs pose. To address this situation, GMC formed the School Finance Facility (SFF) to assist financial institutions to explore and expand lending to APSs. Over the long term, GMC envisions a financial vehicle capable of attracting private investor capital that can drive down financing costs for school operators. The SFF also creates a powerful platform from which stakeholders can begin to understand APS financing needs and develop better industry, market and school performance information. As importantly, the SFF aims to facilitate improved capacity building opportunities for school proprietors in areas of school management and operations which can lead to qualitative improvements in their educational offering and school facilities. Pilot Program With the launch of the SFF, GMC committed $100,000 to fund the exploration of a wholesale finance facility. This project includes an additional $600,000 for pilot investments into Microfinance Institutions (MFIs) and $50,000 in technical assistance and market development grants for the SFF to demonstrate the viability of and demand for such a funding mechanism. The grant funding aims to assist MFIs in quantifying the APS lending opportunities within their markets, funding market research studies by industry organizations or third party consultants that outline the APS lending opportunity and compensating third party consultants for school training that lessen risks to lenders. Partnership Opportunities Technical Assistance & Business Development Services GMC’s focus is to collect and disseminate information that will assist lenders entering the APS market. GMC has committed grant funding to help underwrite this feasibility study and seeks a partner willing to commit an equal amount in grant funding as well as input with respect to the design and implementation of the feasibility study as outlined. GMC is also open to the possibility that additional Technical Assistance and Business Development funding could be deployed through this project to expand the scope of and increase the depth of the feasibility study outlined above and compensate third parties working directly with school in these markets on school quality initiatives that lessen risks to lenders.
What are Affordable Private Schools Affordable Private Schools (APSs) exist throughout the developing world and serve millions of children living in low‐income urban and rural areas. These schools are social enterprises that offer afford‐ able, quality education using sustainable, efficient business models which focus on maxi‐ mizing learning outcomes. Most APSs employ teachers from the local community and charge tuition fees that are affordable to low‐income fami‐ lies. Their combined business principles and academic model provide a sustainable solution to Increasing access and qual‐ ity of education, as well as providing parents with a viable alternative to lower perform‐ ing government schools.
GRAY MATTERS CAPITAL FOUNDATION
Please address all inquiries about the APS Market Development Project to Frank Brown at fbrown@graymatterscap.com