Reclaiming The Moral High Ground

We’re in Hyderabad this week, reporting from the inaugural Affordable Private School Symposium, organized by Gray Matters Capital.  After a long day being steeped in conversations about this new space, the overwhelming thought is the time is now! There is a sense of being in the right place at the right time. A sensation of being part of a sector that is moving forward.

Let me back up. Affordable Private Schools are social enterprises, providing a reliable source of education for children living in low-income urban areas. Families are considered clients, with the right to demand a quality education. School owners put an emphasis on quality and efficiency, justifying the modest tuition charged that allows them to cover their expenses.

Essentially, they are a parallel education system.

As with any parallel system, though, there are questions to be asked. We must evaluate why they exist. As with any market solution, supply and demand drives consumer behavior. And with private schools, we have obvious consumers – children and their families. These consumers are aspirational. These parents hope for a better life for their children. They can see the future, and they will reach it through educating their children.

The problem: government education in the low-income communities where Affordable Private Schools have sprung up is inadequate. For a multitude of reasons, the government does not meet the needs of their populace through their existing education channels. And so the market steps in, sensing an opportunity.

And with that said, according to James Tooley – thought leader in the Affordable Private Schools space: “Through Affordable Private Schools, we can reclaim the moral high ground.” Extensive research has been conducted by Tooley on the market for Affordable Private Schools. The two main research questions: How many schools are there? and How good are they? Well it turns out, there are a lot, and they are very good.

It all started in the slums of Hyderabad’s old city. Wandering through predominantly Muslim neighbors, Tooley stumbled upon a huge private sector serving poor families, proving that the private sector has a valuable role to play in meeting the educational needs of the poor. Official figures from his Hyderabad study revealed 61% of pupils present in the private unaided sector, in a thousand such schools. The project schools had average fees of about US$4 per month, an average student-teacher ratio of 29:1, and a majority of teachers who were college graduates. Families were found to be active in the school choice process, with over two-thirds having investigated at least two schools in addition to the one finally selected. Running schools, even for low-income families, was seen to be a potentially a profitable undertaking.

From here, the research took off – expanding to Nigeria, Ghana, Kenya, and China, among others.  In all of these places, Affordable Private Schools were found to be clearly outperforming the government schools, and doing so at a fraction of the cost!

Consequently, the topic has gained traction and interest. And this is why Gray Matters Capital has convened the Affordable Private Schools Symposium – to find out what’s next for this nascent sector. How will the sector engage the government? At the global macro level, what role should the government play in education? What is their level of responsibility?

As of now, there are a lot of questions, many ideas, but few answers. We’ll explore a few of these ideas in our series of blog posts, live from the symposium.

And don’t miss Beyond Profit’s coverage of the Affordable Private Schools sector in Issue 2 — subscribe now!