Education finance impact measurement helps investors and lenders assess whether education lending is improving education quality, affordability and access.
This page and report shares lessons from the Regional Education Finance Fund for Africa (REFFA), a blended finance fund managed by BlueOrchard. The fund supported financial institutions lending to private education providers, parents and students across Africa.
In addition, the report focuses on the development of the EduFinance Tracker, a web-based platform designed to standardise the collection, scoring and reporting of education impact data. It offers practical insights for impact investors, development finance institutions and financial institutions working to strengthen their impact investing practices.
What did the framework measure?
The framework assessed two main areas:
- Education quality, including school safety, hygiene, governance, teacher qualifications, learning inputs and learning outcomes
- Education affordability, based on household income, total education costs and the number of children enrolled in private education
In practice, we define education as affordable when households can meet education costs without making major sacrifices in essential areas such as food, housing or healthcare.
For additional context, the World Bank guide to measuring household expenditure on education provides guidance on collecting and analysing education expenditure data.
Key lessons
Define indicators clearly
Education finance impact measurement works best when quality and affordability indicators are clearly defined and easy for loan officers to apply consistently.
Integrate data into existing systems
The EduFinance Tracker worked with different management information systems. It allowed automated data connections where possible and manual entry where necessary.
As a result, combining qualitative education information with standard loan portfolio data helped reduce duplication and reporting effort.
Secure management buy-in
Successful implementation required commitment from senior management, IT, operations, credit and investor-reporting teams. For this reason, data mapping, technical integration and staff training all needed dedicated resources.
Include reporting requirements in loan agreements
In an intermediated lending model, fund managers have limited influence over an investee’s daily operations. Clear reporting covenants in loan agreements can help secure the data required for reliable impact measurement.
Therefore, the investment team achieved the best results when it introduced the reporting framework immediately after signing the loan agreement, when engagement with the financial institution was strongest.
Budget realistically
Project teams underestimated the resources needed for implementation. Tailored onboarding, IT customisation, training and ongoing coordination increased both the cost and timeline of the project.
Therefore, treat impact measurement systems as structured implementation projects, rather than simple technology deployments.
Understanding Education Finance Impact Measurement
What is education finance impact measurement?
It is the process of assessing whether education lending improves access to education, education quality and affordability for schools, students and households.
How can education quality be measured?
Lenders can assess education quality through the education environment, learning inputs and learning outputs. Indicators may include school safety, hygiene, teacher qualifications, pupil-teacher ratios, examination results and completion rates.
How can education affordability be assessed?
Lenders can assess affordability by comparing household income or expenditure with total education costs and the number of children enrolled in private education.
What are the main implementation challenges?
Common challenges include integrating different technology systems, collecting additional qualitative data, training loan officers, addressing data protection concerns and allocating sufficient resources for onboarding.
Conclusion
The experience of implementing the EduFinance Tracker shows that effective education finance impact measurement requires more than a technical platform.
It depends on clear indicators, integrated reporting processes, management commitment, staff training, data protection and realistic implementation budgets.
Download the full report for further detail on the measurement framework, training approach and implementation recommendations.
Download the full report
The report is intended for existing investors and illustrative purposes. REFFA is closed to new investments.
Read more about BlueOrchard’s work in the publications section.