High quality education is one of the key elements to a path out of poverty. Yet funding for most students from low- and lower middle income remains out of reach. Existing government funding and scholarships often do not fill the gap while private capital remains scarce. These barriers to higher education exacerbate inequality. Additionally, lack of funding alternatives adds on to the challenge in accessing higher education.
With 617 million youth worldwide lacking in basic mathematics and literacy skills and 750 million adults – two-thirds being women, remain illiterate in 2016, there is a need to reduce the financing gap in the market. Income Share Agreements (ISAs) that relies on a student’s potential to thrive in the future, has been proven to work in Africa. About 10,000 higher education students benefitted from the ISAs provided by Chancen International. In Asia, Octava Foundation along with partners WEDU and Algost Enevoldsen Foundation had collectively launched Pioneer Fund to support more than 400 students and deploy at least USD$1 million by 2025.
Yet, ISA alone may not be sufficient. Solutions with business model that is investible or potential to be investible; and those with long term sustainability and ability to drive more capital into the space are useful funding alternatives. Other initiatives including conducting market studies, research projects, feasibility assessments and impact assessments are also necessary in identifying solutions beyond ISA. In this regard, a competitive call has been launched recently to award inclusive, fair, and affordable financing solutions that will enable more young people to enter tertiary education as well as improve education outcomes and increase youth employment in the region.