Her school was a refuge for children whose parents had to work and were concerned about safety. The market was a hazardous place with open fires, snaking electricity cables, standing water, wobbly trucks loaded down with produce and wares, and little in the way of pedestrian amenities like sidewalks.

Paulina’s bare-bones school served around 400 students and was a lesson in “making do.” Tuition revenue was barely keeping the doors open; there were practically no teaching materials; and her teachers lacked training. Her most pressing need was securing a loan to reinforce the second floor.

Paulina was a go-getter and creditworthy, having borrowed on multiple occasions to finance her successful yam business. But when she sought a loan to fix up her school, banks turned her down, including the one with which she had more than established her creditworthiness.

I was in Ghana seeking to learn about microfinance as a tool for supporting private schools that catered to the most economically marginalized populations in developing markets. What Paulina told me struck a nerve. Why could she obtain financing for her yam business but not for her school, which clearly wasn’t lacking for pupils and had the support of parents who worked in the market?

Once I began to pursue answers in earnest, it became clear that Paulina’s story was not unique. Her school was one of an estimated 6,000 low-fee private schools in Ghana, according to a 2011 report by the International Finance Corporation (IFC).[1] Most were bootstrap affairs born of necessity, providing a viable means of education for pupils from low-income communities who might otherwise remain unschooled.

The proprietors of these schools typically lacked financial and management acumen. And as I also discovered, their struggles to make improvements were compounded by the high cost of borrowing money in Ghana (if they could even qualify for a loan to begin with) and the fact that government and multilateral funding agencies offered little to no support because the schools were privately owned.

I’d started the IDP Foundation, Inc. (IDPF) in 2008 to fund medical research and provide investment capital and program-development services aimed at fostering economic opportunity and supporting educational advancement in underserved communities. A year later, in partnership with a Ghanaian microfinance institution, Sinapi Aba, we launched the IDP Rising Schools Program (IDPRSP) targeting low-fee private schools shunned by banks as credit risks.

Read more of the IDP Foundation story on our Medium page here.