Elevar’s thesis in education and employability comes from a simple observation: education for their children is one of the highest expenditures within our customer’s spending wallet, and yet access and quality continue to be a challenge. We have to solve for parents within low income communities, and not just their children. For our target segment, while investment in education is upfront, the value of such education is not obvious, unless realized and measured by employability and an enhancement in family income. Our goal is, therefore, to invest in distribution models that leverage technology and community strengths to increase access to affordable quality education, enhance the skills of the underemployed and return dignity and pride to jobs such as sales agents and teachers.
At a recent Beyond Discussions event by Elevar, we explored our thesis with several friends of Elevar, experts in the field, and with our entrepreneurs in the education and employability sector leading the conversation. Scarcity of capital, perceptions of value and affordability, content curation for skill development, and the sheer scale of the problem are challenges leading to unemployment and underemployment. These are pain points our entrepreneurs are addressing, furthering our ambition for greater access to education and better employability for low income communities.
Driving capital to amplify the impact of affordable schools in India, Varthana offers financing options to invest in infrastructure development (classrooms, buses and toilets), teacher training and to introduce new learning methods in their classrooms. Capital outlays on infrastructure stress cash flows in these schools, exacerbated by their limited access to debt. What these schools need is timely and affordable capital which enables growth, allowing them to build their connect with the community. Through its 32 branches, Varthana has 3,700 active schools in its borrower base that have served 3.5 million students since the company started in 2013. Over 90% of its loans are issued to affordable schools whose annual tuition is below $500. Varthana sees itself not only as a lender but also as a non-banking relationship company, continuously evolving to address unmet needs of its customer segment. The company has expanded its product offering to include student loans for higher education, health and accident insurance options for schools and students, and advisory services for school management to improve student outcomes.
With its mission to design for excellence, LEAD School’s school-in-a-box solution provides excellent curriculum via a simple technology-based delivery model for affordable schools (<$700/student in annual fees). From 11 active schools in March 2018, the company now works with over 500 schools, reaching over 200,000 students enrolled in these schools. Participating schools have shown English and Mathematics literacy levels of its students at beyond 85% of learning benchmarks, well surpassing the initial company targets. In Latin America, Grupo VI-DA addresses the literacy gap and challenges created by limited access to quality Spanish content. Its digital library has over 80,000 Spanish titles among its 325,000 digital books sourced from 3,500 publishers. Extending the effort to improve literacy and analytical skills, the company has developed an EdTech reading and assessment platform dedicated to improving K-12 education in classrooms. By ensuring close alignment with teachers and students Grupo VI-DA helps affordable schools remain up-to-date on syllabus, content and technology, and greatly improve student experience.
Self-employment, even if driven by lack of job options, can be empowering for families when coupled with income-generating opportunities. Mvalu (2019) agents are beginning to demonstrate that employment need not be uni-dimensional. Trust relationships that exist in a social construct can be leveraged to distribute financial products and services within their communities. This multi-pronged approach leads to improvement in family income of agents, and access to capital for low income communities. Mvalu aims to build India’s largest distribution platform, leveraging underemployed individuals, such as home makers, students, shop owners and retired individuals in Tier II and Tier III cities, for delivery of products and services. These are / will be built on (i) a deep and wide channel of agents, (ii) a digital platform of tools to enable assisted sales and, (iii) technology to understand and influence customer behaviour.
BEDU (2016) combines a proprietary tech-enabled platform and on-line curated content with an asset-light, off-line distribution model to provide affordable courses linked to skill enhancement, and consequently, career advancement. BEDU’s courses are designed to allow individuals to “level-up”, by providing access to the most relevant content to develop practical skills while accommodating existing life and job demands, at a fraction of the cost that a traditional university would charge. Students have reported a 20% to 30% improvement in family income on completing a BEDU course. Having already worked with over 1,700 students in Mexico, BEDU aims to leverage its technology platform to help thousands of students each year.
To conclude, as we think of the future of work and incomes for low income communities, we believe that at Elevar, we need to think of the entire continuum of education, from the early years to how one must stay relevant in a fast changing world. After all, perceptions of value and affordability of education go hand-in-hand and are inextricably linked to jobs and incomes. An underlying thread that unites Elevar with our entrepreneurs operating in the education and employability sector is an empathetic connect with our target customer, an unshakeable faith in their ability to discern quality and value, and a shared goal of returning dignity to all jobs and activities. By focusing on this continuum with a human-centred approach, we think we can positively address a daunting social challenge – the widening skill gap that impacts not just those in the current workplace but those who will enter the workplace in the years to come.