Posted on 01 September, 2020
One in four girls in India are married before the age of 18 (Source: UNICEF). Limited access to quality education for girls and extreme poverty contribute to the persistence of this antiquated and terrible practice. Education empowers young women to push back against the prospect of underage marriage. According to a World Bank study, one year of additional secondary education reduces the likelihood of marrying before the age of 18 by 5% or more in developing countries.
Parents from low-income families in India are either unable to or are disinclined to support the education of the girl child. Poverty often pushes these parents to take girl children out of school and get them married so the girls are no longer a “burden” on the family.
Fara* is the mother of six daughters and a son. Fara lives with her husband and four children in a tiny one-bedroom house in a slum in northern Bangalore, a city in South India. The couple run a food catering service and earn an irregular and unpredictable income.
With nine mouths to feed in the family, Fara and her husband struggled to make ends meet and were unable to set aside a lump sum to pay their children’s upfront tuition fees. Three of their older daughters were married before they turned 18, as the family could not afford their education. “At that time, marrying them off was our only option,” says Fara regretfully. The married daughters are unemployed, do not earn an income and are financially dependent on their husbands and their families. She hopes that her younger daughters can have better lives.
Opportunity via Shiksha Finance
In 2019, Fara learned about Shiksha Finance from other women in her neighborhood. Shiksha Finance is a provider of loans to parents of students from low income families for their children’s tuition fees. The company also provides loans to low-cost private schools for improving their infrastructure.
Shiksha’s team assessed Fara’s financial condition and confirmed her eligibility to avail the ‘study loans’ for the education of two of her younger children studying in Grades 5 and 8.
The Shiksha team helped Fara form a joint liability group (JLG) with four other women, and informed Fara about the loan terms, repayment schedules, and mode of repayment. Shiksha’s ‘study’ loan product is designed to ensure uninterrupted education for children.
The 12-month tenured ‘study’ loans helped Fara make upfront payments at the beginning of the academic year for children’s education.
With monthly earnings from her catering business, Fara has repaid the loan through monthly instalments. Fara feels empowered as she has a voice in managing household finances. She has now become the leader of the JLG. She liaises with Shiksha’s personnel for financial literacy trainings for the other women in the group and in the surrounding communities.
Fara is relieved that her younger daughters will get education and their future job prospects are improved. She hopes that as earning members of the family, her daughters will be financially independent and are likely to have empowered and equal relationships with their future spouses.
Women with school or college education have high rates of participation in the formal labor market, earn higher incomes, have fewer children, marry at a later age, and enable better health care and education for their children, should they choose to become mothers. All these factors combined can help lift households, communities, and nations out of poverty.
Shiksha Finance provides study loans to 60,000 women such as Fara for the education of their children. The company has enabled access to affordable education for over 400,000 girls across 2,500 low-cost private schools in India. Zephyr Peacock India Growth Fund is a major investor in Shiksha, with a 29% stake. Zephyr Peacock is actively involved in Shiksha’s strategy and has implemented a Gender Action Plan at the company to improve access to education for girl children, ensure gender diversity within the company, and promote financial inclusion of women.
*Name changed to protect privacy
Zephyr Management is a global emerging markets investment manager, specializing in the creation and management of highly focused private equity funds
Since its inception in 1994, Zephyr has sponsored and/or managed 26 investment funds in both public and private securities markets representing approximately $1.2 billion in combined commitments and assets under management
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Investment activities are currently focused on India, Sri Lanka and Africa.
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