MICROCAPITAL STORY: Global Non-profit Microfinance Network Opportunity International Launches Microschools for Opportunity

Opportunity International, a Christian microfinance organization, has announced the expansion of its microfinance school loans program “Microschools for Opportunity.” “Microschools” provides loans to “edupreneurs” who open schools in poor neighborhoods where children, especially girls, would otherwise be unable to access public education. As of June 2007, the Opportunity International Network had over one million active clients globally and a loan portfolio of USD 450.2 million. As of December 2006, the organization had USD 31.7 million in total assets and USD 534,000 in total liabilities.

President and CEO of Opportunity International Christopher A. Crane said, “Our core business in microfinance is making small loans to entrepreneurs to help them work themselves out of poverty. But often, that isn’t enough.” According to Mr. Crane, Microschools of Opportunity is a critical part of the organization’s three-branch system which includes micro loans and micro savings, microinsurance and education.

There are currently Microschools in 50 neighborhoods and towns in Ghana in a pilot program. The average school size of a Microschool in Ghana is approximately 200 students. “Our initial goal is to expand the pilot into several other countries in Africa and Asia,” said Mr. Crane. Opportunity expects to help educate one million children over the next three years.

School loans tend to be higher than small business loans which are typical of microfinance institutions. School operators need more funds and longer repayment terms, usually to build or expand school facilities. Loans are of several thousand dollars and payment terms can last a year or longer.

James Tooley, a researcher on schools for the poor, has published an extensive three-year study on the impact of these schools in five developing countries– China, Ghana, India, Kenya and Nigeria– which won Gold Prize in the first International Finance Corporation/Financial Times Private Sector Development Competition in September 2006. He concluded that these schools outperform their public school counterparts. “In every setting, teacher absenteeism was lower and teacher commitment, the proportion of teachers actually teaching when our researchers called unannounced, was higher in the schools for the poor than in government schools,” said Mr. Tooley.

Opportunity International has 42 member organizations in 28 countries and support partners in six countries: Australia, Canada, Germany, New Zealand, and the United States. Opportunity International has provided microfinance in developing countries for 35 years and is currently one of the largest microfinance organizations in the world.

Additional Resources:

Opportunity International

Opportunity International Press Release: “Opportunity International launches Microschools- new frontier in breaking the chain of poverty.”

MicroCapital story, November 20, 2007: “Opportunity International Australia Raises $30m to Supply One Million Indian Entrepreneurs with Microfinance.”

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