Providing quality education in India – a social finance solution

Quality Education India Development Impact Bond

At a glance

While India has made significant progress toward achieving universal primary school enrolment, the quality of education remains a key challenge.
96.7 percent of children ages 6-14 are currently enrolled in a school in rural India; but, the majority of students lack basic literacy and numeracy skills due to the poor quality of education.¹

The Quality Education India Development Impact Bond (QEI DIB) is a performance-based model that supports education providers in India to help improve learning outcomes for over 200,000 primary school students in Delhi, Gujarat and Rajasthan. It was developed through partnership between UBS Optimus Foundation, British Asian Trust, and Michael and Susan Dell Foundation.

The partners

Our education providers work in government schools and low-fee private schools in Gujarat, Uttar Pradesh, Maharashtra, and Delhi. All our students are from marginalized communities and migrant families.

Educational Initiatives & Pratham Infotech Foundation is a computer-based adaptive learning platform to close learning gaps, with handholding for teachers on data literacy and assessments in Uttar Pradesh.

Gyan Shala strives to enable disadvantaged children of poor rural areas in urban slums in Gujarat to join the professional class of tomorrow. The organization provides a cost-effective, holistic solution for quality school education, enables children from struggling communities to attain higher levels of learning, and introduces core elements of curriculum-pedagogy in government schools.

Kaivalya Education Foundation works in the field of education in Ahmedabad
(Gujarat) and Mumbai (Maharashtra). Its intervention started in 2008 with the focus to transform the quality of education in public schools by providing leadership training to school principals.

Society for All Round Development is a non-profit organization in New Delhi aimed at increasing the participation of minorities and disadvantaged communities in mainstream development process. The mission is to empower these groups by improving their access to quality education and health service.

The problem

A typical student in India is at least two grades behind the level that is expected at their age. By Grade 5, less than 50 percent of children can read a Grade 2 level Hindi text.¹ A number of underlying issues contribute to the poor quality education at the primary education level in India:

Teacher attendance is only 85 percent in primary and middle schools, and there is a teacher shortage of 689,000 teachers in primary school.²
Poorly performing students often lack the opportunity to catch up with their peers once they have fallen behind.
School principals are not equipped with certifications or course of education to take on management responsibilities.
53 percent of schools have functional girls' toilets and 74 percent have access to drinking water.³

The solution

Development Impact Bonds (DIBs) are an innovative way to finance development. They are 100 percent focused on outcomes and have the potential to leverage private investments to address some of the world's greatest challenges.

They work by getting a philanthropic investor to pay up front, through the UBS Optimus Foundation, for the costs of an intervention, which is then measured by clear, predetermined metrics.

If the intervention succeeds in achieving the goals, the outcome funder will contribute to the program based on the performance. The initial capital plus the performance-related contribution are then repaid to the foundation and can then be rolled over into future philanthropic programs.

Note: A Development Impact Bond (DIB is not a financial product – it's a way to describe a concept whereby a charity gives money to support a philanthropic need or cause, but may be repaid in the future - possibly with “interest”, which theoretically provides the charity with a return on the original “investment".

The evidence

The following initiatives have proven to be solutions to improve learning outcomes in India:

Supplementary remedial education to close the learning gaps for children at risk of dropping out;
Community mobilization to hold schools accountable for performance;
Curriculum restructuring using innovative pedagogy techniques that move away from rote-based memorization, toward individualized learning; and
Teacher training to improve the quality and motivation of educators.

The Impact

The outcome target is to improve in literacy and numeracy outcomes over four years. The success is measured through annual evaluations that check learning gains in literacy and numeracy skills across 4 levels: