FELIPE BARRERA-OSORIOILYSE ZABLE

WORLD BANKMARCH 31 , 2010

A Characterization of the Private Segment of Kenya’s

Educational Sector

Public-Private Partnerships (PPP)

Several governments around the world are adopting novel strategies to reach the Millennium Development Goals Governments are forming alliances with the private sector in primary

education Initiatives like PPPs require a dynamic private sector

The private sector is an important player in education Private providers, by having a more flexible, are more effective in

providing education The separation of roles between the finance role—lead by the

government—and the provision role—lead by the private—can increase efficiency

Contract can serve as a vehicle of quality assurance by introducing clauses of specific delivery of quality of education

A pragmatic view states that the government alone cannot archive universal education, and that the private sector is an important player de facto that can help, especially reaching low-income households

The objective of the study

This study presents a description of the private sector in education in Kenya Presents new data that allows the characterization of

private institutions in Kenya’s education sectorWe make use of a survey collected for the impact

evaluation of Kenya’s Private School Support Program (KPSSP) and a follow-up case study KPSSP aims to provide local currency financing and

advisory services to private K-12 institutions On December 7, 2006, IFC signed a risk-sharing agreement

with K-Rep Bank (K-Rep) of up to 120 million Kenyan shillings ($1.7 million equivalent) on loans extended to eligible private schools in Kenya.

Characteristics of the sample of schools

Baseline survey: Information for 142 schools between September and

November 2007 in Nyeri (19.2% of the sample); Nukuru (16.9%); Mombassa (24.6%), and Nairobi (39.2%)

The sample includes 798 teachers, and 8,863 students 68% are primary, 28% secondary, and 4% both primary and

secondary Sample of schools was chosen from a list of private providers

Follow up case study: Made between June and July 2009 35 schools from the original list Schools that were able to get a loan through the program;

schools that were in the process of applying; and schools that did not apply for the loan.

Characteristics of private schoolsSchools Characteristics

Mean Std. Dev Obs. Infrastructure

Classrooms 10.61 (5.56) 142

Sports fields 1.19 (1.43) 142

Toilets 12.25 (10.33) 142

Desks 235.82 (842.24) 142

Computers (students) 75.94 (838.69) 142

Library books 1077.49 (3169.09) 142 Human factor

Administrative Personnel 18.27 (13.50) 142

Teachers 15.73 (10.05) 142

Students, 2005 147.2 (157.89) 132

Students, 2006 162.79 (164.00) 135

Repeaters, 2005 2.26 (8.65) 135

Repeaters, 2006 5.17 (29.56) 132

Dropouts, 2005 8.79 (12.52) 132

Dropouts, 2006 9.56 (12.18) 133 Administrative capacity

Computers for Account 0.36 (0.48) 142

Computers for Payroll 0.44 (0.50) 142

Computers for Payments 0.38 (0.49) 142

Computers for Stud. Records 0.39 (0.49) 142

Computers for Exam records 0.37 (0.49) 142

Board 0.57 (0.50) 142

Strategic Plan 0.85 (0.36) 142

Staff manual 0.72 (0.45) 142

PTA 0.47 (0.50) 142

01

00

200

300

400

500

600

700

800

900

200

6

0 100 200 300 400 500 600 700 800 9002005

Number of students

Characteristics of teachersTeachers'' characteristics

Mean

Std. Dev Obs.

Teachers characteristics

Age 30.56 (7.45) 785

Male 0.36

794

Secondary certificate 0.13 (0.33) 794

Teacher's college certif. 0.56 (0.50) 794

Teacher's college diploma 0.08 (0.28) 794

Post graduate diploma 0.04 (0.19) 794

University degree 0.18 (0.39) 794

Masters graduate 0.01 (0.11) 794

Year of experience 6.06 (5.97) 770 Time allocation

Number of lessons (week) 27.34 (7.68) 749

Marking (% of time) 0.13 (0.09) 775

Teaching (% of time) 0.49 (0.19) 781

Preparing class (% of time) 0.14 (0.09) 773

Discipline (% of time) 0.05 (0.07) 548

Meeting with parents (% of time) 0.05 (0.07) 430

Administrative task (% of time) 0.08 (0.09) 426

In teachers meetings (% of time) 0.05 (0.06) 587

Meeting with students (% of time) 0.07 (0.09) 647 Classrooms

Homework, every lesson 0.3 (0.46) 798

Homework, every day 0.68 (0.47) 798

Number of students, last lesson 89.05 (238.47) 798

Absenteeism of teacher 0.28 (0.78) 798

Late arrival of teacher 0.32 (0.85) 798

Characteristics of studentsStudent characteristics

Mean

Std. Dev Obs.

Student characteristics

Gender (female) 0.51 (0.5) 8863

Age 12.6 (2.57) 8207

Work for pay 0.03 (0.17) 8863

If yes, hours per week 12.3 (15.72) 182

Number of people in household 6.03 (2.19) 8104

Mother employment

Self-employed 0.37 (0.48) 8067

Employee 0.37 (0.48) 8067

At home 0.27 (0.44) 8067

Father employment

Self-employed 0.34 (0.47) 7272

Employee 0.61 (0.49) 7272

At home 0.05 (0.22) 7272

Household characteristics

Household has:

Television 0.84 (0.37) 8863

Refrigerator 0.46 (0.5) 8863

Radio/stereo 0.91 (0.28) 8863

Computer 0.28 (0.45) 8863

Car 0.43 (0.5) 8863

Bedrooms 0.95 (0.22) 8863

Asset index (1) 0.65 (0.25) 8863

Tap water 0.81 (0.39) 8863

Sewer 0.61 (0.49) 8863

Cooking fuel 0.6 (0.49) 8863

If missed school, number of days in past two weeks 2.94 (2.27) 1949

Hours homework per week 5.87 (5.63) 6983

Ever repeated class 0.39 (0.49) 8863

Mark in math 64.54 (19.87) 8010

Mark in English 66.11 (16.42) 7993

(*) Asset index is equal to total number of assets in the household divided by 6

0 5 10 15 20

Primary

Average fees Transport

Lunch Tutoring

Boarding

0 5 10 15 20

Secondary

Average fees Transport

Lunch Tutoring

Boarding

1000 KSHAverage fees per term

Schools’ average fees per term were around 18,800 KSH ($284) and 18,200 KSH (US$275) per term for primary and secondary

0 .1 .2 .3 .4

Activities, last Math class

Copy from blackboard Working independently

Working in group Free timeTalking with friend Solving problems on blackboardTaking exam

Active learning is the critical factor to induce gains in achievement. Copy from blackboard and “independent work” account for more than 50% of the time spend in the class.

0.2

.4.6

.8

Fra

ction

0 2 4 6 8 10Number of days

Math teacher

0.2

.4.6

.8

Fra

ction

0 2 4 6 8 10Number of days

English teacher

Students answersAbsentism of teachers

30% of students reported math teacher missed at least one day of school in the past week (40% for English)

Sustainability of Schools

The sustainability of schools depends on the stream of students, which in turn, determines the flow of revenues The majority of the demand for these schools comes from nearby

householdsYear of creation can be a strong indicator of the viability

of the schoolThese schools are observing a huge demandLiquidity constrains are binding for private schools

80% of schools indicated that they would access a bank loan at prevailing interest rates if they could, to be used predominantly for physical expansion and, secondarily, purchasing computers and other educational materials.

Own savings and net revenues were the predominant options for financing non-recurrent expenditures

There is a positive relationship between number of students and year of creation

020

040

060

080

010

00N

umbe

r stu

dent

s, 2

006

1960 1970 1980 1990 2000 2010Starting year

Starting year of the school

0.0

5.1

.15

.2.2

5F

ract

ion

0 25 50 75 100 125 150 175 200

Application for enrollment

There is demand for the schools…

010

000

2000

030

000

4000

0C

ost,

2005

0 10000 20000 30000 40000Revenues, 2005

1000 KSH0

1000

020

000

3000

040

000

Cos

t, 20

06

0 10000 20000 30000 40000Revenues, 2006

1000 KSH

Revenues versus costs

….and they are either breaking even or making profits

0.0

5.1

.15

.2F

ract

ion

0 20 40 60 80 100

On time

0.0

5.1

.15

.2F

ract

ion

0 20 40 60 80 100

At end of term

Fee % unable to collect

Schools have difficulties in collecting fees. More than 50% of schools were not able to collect an average of around 15% of fees by the end of the term

Own savings and net revenues were mainoptions for financing non-recurrent expenditures

0 .1 .2 .3 .4

Options for finance of non-recurrent expenditures

Net revenues Existing bank loanInformal money lender Own savings

Director loans Sell share holdingsDonations OverdraftChurch funding School fees

0 .2 .4 .6 .8

Potential uses of loan

Expand exis. facil Repair / Modern.Train teachers BusComputers / Others mater.

Loan to be used predominantly for physical expansion and purchasing computers and other educational materials

Administrative capacity

Schools reported employing 18 administrative staff This number seems high given that the average school

size is 140-160 students.The majority of schools do not utilize

computerized systems for accounting, payroll, tuition, and student and exam records

Critical decision-making is distributed across different people

The use of computers is low

0.2

.4.6

De

nsi

ty

No YesAccounts

0.2

.4.6

De

nsi

ty

No YesPayroll

0.2

.4.6

De

nsi

ty

No YesTuition payment

0.2

.4.6

De

nsi

ty

No YesStud. records

0.2

.4.6

De

nsi

ty

No YesExam records

Use of computerized systems

Three main messages

The private education sector in Africa is growing fast, even more than the public counterpart

The quality of private schools diverges enormously

The private sector is reaching low-income populations, filling a vacuum that the government is leaving behind.

Some policy implications

The study presents a mixed view of private institutions in Kenya’s education sector. They are schools with fairy high level of infrastructure, with young qualified teachers. They are schools with an “adequate” and growing number of students enrolled from

middle- to low-income populations. However, they are schools that face serious administrative challenges (they do not

have systematic book-keeping or audited financial statements) These schools are hiring young teachers, with low experience and the

minimum level of education required for the profession Young teachers are open to new challenges However, the schools are reaching very difficult populations: need experience teachers

The KPSSP is proposing the establishment of a Local School Development Provider, which can provide educational services for the private sector If the government is interested in PPPs, and the private sector is reaching low-income

households, there are reasons for public intervention. If the private sector is sorely for-profit, reaching well-off populations, an institution

that provides technical and administrative support for schools should be financed by private funds.