A Marketplace for Affordable Private Schools

Enterprising Schools, an initiative of Gray Matters Capital (GMC), is working with over 200 Affordable Private Schools (APS) in Hyderabad alone and is creating a marketplace of solutions for this segment. Pradeep Sharma, India Director of GMC, explains the model to us in detail.

What is the problem that you are trying to solve?

Affordable Private SchoolsWe are trying to improve the quality of education in Affordable Private Schools (APS) segment. Affordable Private Schools are predominantly self-sustaining, unsubsidized private schools which have a typical enrolment of 300-400 students and charge an average fee of 200-400 Rs per month.

There is a demand in the market place for accountable and good quality English medium education with access to computers. With more parents from lower income groups willing to pay, this sector has realized a sustainable model for schooling. Because these schools are started by entrepreneurs, they put an emphasis on quality, efficiency and performance which justifies the modest tuition fee that makes them sustainable. Enterprising Schools looks at this as a solution that can transform the lives of students from low income communities.

However, the APS sector faces many challenges like lack of standards, information gap and limited access to resources. We are trying to address these issues.

How does Enterprising Schools work?

APS networkWe are trying to improve the quality of education in the APS sector by developing a rating system which we hope will increase the sector transparency, build industry infrastructure and drive the school performance. Once the schools undergo rating, they get an assessment report detailing out their strengths and areas of improvement. Enterprising Schools aggregates data from multiple schools and develops sector specific benchmarks for stakeholders in the APS ecosystem such that it can draw resources into the segment.

Further Enterprising Schools is developing APS ratings to share it with the parents with a hope that this tight feedback loop will create better accountability of APS schools to parents- their fee paying customers.

After the schools undergo the assessment program, the school leaders are given an opportunity to undergo a Management Leadership training program. The leadership training program is made mandatory for the schools to be eligible for the school improvement voucher program.

How does the voucher program work?

The idea of the voucher program is to create a marketplace of affordable solutions for APS. We give vouchers to school leaders worth 20,000 Rs. This voucher is redeemable for 80% of the invoice amount of any solution that the schools decide to try from among the chosen solution providers. School leaders based upon the suggested areas of improvement in the school assessment report, choose solutions that they want to try through the voucher program.

We also have a rating fund. Enterprising Schools has partnered with M-CRIL as its independent assessment partner. The schools have to pay to MCRIL to get assessed. Enterprising School’s rating fund provides a declining subsidy varying from 90% – 70% in the 1st year and 50% in the 2nd year to encourage rating adoption. We hope that from the third year, it will be sustainable based on the value that the schools derive from the assessment process and that the access to APS ratings will make parents drive the adoption of ratings by schools.

How do you measure impact?

Monitoring the progress in student learning outcome through student assessments over a period of time is a measure of the impact. We measure improvement in teacher competency in English and Maths through teacher assessments. We use a classroom observation tool developed by The Teacher Foundation to observe improvement in pedagogy.

We track the percentage increase of number of students in the 1st class division of Std. 10th exam. We also track parent satisfaction, financial discipline and financial performance of the school. The number of schools reached out so far, number of repeat rated schools, number of new products introduced in the APS market and number of schools that made independent business outside the school voucher program indicate whether this is sustainable.

What is the size of your team? How long have been operational?

We are a team of 8 with 4 in India and 4 in the US. Of course we have an extended team through M-CRIL, Gray Ghost Ventures, ISFC, Policy Innovations, CCS and other partners. We have been operational for over a year now. We started off with a pilot of 35 schools in Hyderabad and have scaled to about 200 schools in Hyderabad alone. Our target for the current academic year is 325 schools. We have started piloting in Delhi and will expand in Delhi, followed by other cities.

What are your biggest challenges?

For any solution to be sustainable in the APS sector, it has to be both affordable and high quality solution at the same time. It has always been difficult for us to find high quality affordable solutions which can scale based on low margin high volume business model.

Right now, good news is that schools are at least paying a part of the price. What would be interesting to see is how the school owners respond, after two years, when the subsidy is taken away. The declining subsidy model will help us understand how the market will respond.

What kind of support are you looking for?

We are certainly looking for partners who have affordable and scalable solutions for this market. We also love hearing from donors, foundations and investors who want to partner with us.

To know more, check out http://www.enterprisingschools.com

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