AIMM Sector Framework Brief
Sector Economics and Development Impact Department
International Finance Corporation

EDUCATION
July 2019

Development Impact Thesis – Promoting investment in the education sector is critical to the achievement of the WBG twin goals of
ending extreme poverty, and boosting shared prosperity by enabling social mobility, higher wages, reducing inequality and boosting
economic activity. IFC’s engagement in the education sector is designed to improve access to affordable, quality and relevant
education at all levels, reduce gender disparities, improve learning outcomes, and promote acquisition of the knowledge, mindsets,
and skills required to promote sustainable development. IFC provides financing and advisory services to educational institutions to:→ Increase access to affordable quality education→ Increase quality of education delivered at
different levels→ Improve employability and income expectations→ Increase productivity→ Improve competitiveness in the education
market: increase scale and quality of services→ Introduce international education platforms thatfurther integrate education systems→ Promote market-wide adoption of inclusive
business models in educationProject
Outcomes

Contributions toMarket Creation

Development Gaps Addressed



•
•
•
•
•

Low access to education
Low quality of education
Lack of relevant skills
Unemployment
Inequality

Rating Construct – All AIMM sector frameworks include detailed guidance notes that help define project outcomes and contributions
to market creation, aggregating to an overall assessment of development impact.
•

For project outcomes, stakeholder effects are the key components for which industry-specific benchmarks define the context
in which an IFC operation seeks to drive changes. This gap analysis is combined with a separate set of impact intensity
estimates that specify the expected results using predefined indicators.

•

For contributions to market creation, industry-specific market typologies define stages of development for four market
attributes (or objectives): competitiveness, resilience, integration, and inclusiveness. These market typologies, whencombined with estimates of how much an intervention affects the development of a market attribute, provide thefoundation for IFC’s assessment of an intervention’s market-level potential for delivering systemic changes.
PROJECT OUTCOME INDICATORS
Access• Students enrolled• Students enrolled from a target group (incl. female, rural, low income)• Targeted income segments• Lifelong learners (vocational)

Stakeholders

CONTRIBUTION TO MARKET CREATION INDICATORS

CompetitivenessQuality• Learner to teacher ratio• Prevalence of full-time staff in faculty• Accreditation (tertiary and vocational)• Percentage of faculty with post graduate qualifications (tertiary)• Percentage of teachers with required qualifications (K12)• Employment rate within 12 months of graduation (tertiary and vocational)

Market Structure• Change in competitive market behaviors
Price• Change in the market pressure on tuition fee increases
Accreditation• Change in market wide acceptance of accreditation
Learning methods• Promote change in learning methods and curriculum innovation
Product diversity• Change in product diversity

Integration

Connectivity• Enable deeper and more effective public policy formulation through collaboration• Encourage systematic support for R&D into critical areas and STEM skills• Enable platforms to better connect the market with opportunities throughpartnerships

InclusivenessMarket-wide focus and access for underserved groups• Promote adoption of inclusive business models, practices or products• Better regulation to facilitate access/affordability for underserved groups

Affordability• Tuition fee relative to comparator• Learners enrolled with financial support

Sector Specific Principles or Issues – The following principles will be applied for projects rated under this framework:
Principle or
Issue

Treatment Under Framework

AccessThe private sector plays a key role in improving access to education, particularly in regions where fiscally constrained governments
are unable to expand public education. To do this, IFC relies on scalable and affordable models that allow for efficient cost levels
and improved management practices, increasing enrollment levels. Innovative delivery models, such as distance learning throughblended and online approaches, can also contribute to increasing access to tertiary education for underserved populations inrural/remote areas, raising their expected income levels. They can also raise education standards through an increased focus on
quality and relevance.

Youth employability

Skills mismatch and youth unemployment pose a drag on the economy. Currently 40% of employers struggle to recruit skilledworkers, yet 76 million youth remain unemployed. Furthermore, workforce displacement and job market disruption resulting fromtechnological advancement will lead to an estimated 400 million workers to change jobs by 2030 due to automation. Hence, one ofthe priorities for the education sector is to preserve and enhance employability promoting life-long learning opportunities, as wellas access to market-relevant skills. Promoting employability includes enhancing entrepreneurship, in contexts where workers willtransition to the gig economy (temporary and flexible contracting of independent workers instead of full-time jobs).

Quality

The education sector is facing significant challenges, especially related to on-going learning crisis where 263 million primary andsecondary age children are out of school and approximately 620 million learners do not meet minimum proficiency in math andreading. Hence increasing access to education, as measured by gross enrollment rates and years of schooling, is only a part of thechallenge faced by developing countries. Quality needs to be raised to ensure students are well prepared to thrive in rapidlychanging economies. Improving quality, as measured by learning outcomes, is a priority for the education sector. Under IFC 3.0 andin the context of the Human Capital Project, IFC will focus on market creation to develop foundational skills (literacy and math),including those critical for the future of work, such as STEM disciplines, digital skills and English language among others.

Early childhood

There is growing recognition that investing in early childhood development (stimulation and education) has significant benefits,setting the foundation for future learning. Therefore, investments in early childhood (0-5 years) to provide strong foundational
skills is key to tackle the learning crisis. At present, investments in early childhood development are inadequate; childcare andpreschool markets are fragmented with inconsistent quality. Scalable and affordable preschool programs with adequate
curriculums and infrastructure are an important component of IFC’s strategy in education. Tools to build caregiver/teacher capacity
to effectively help children develop at this stage are also much needed in the market.

Investing in teachers

Investments in teacher professional development to increase their skills and capacity, scale up access to tools to support innovative
pedagogical practices in teaching, micro-credentials to build skills-driven career paths, and competency validation are all importantelements that contribute to enriching the learning experience for young students enhancing the quality of education. Teacher
quality is the single most important contributor to improving learning outcomes.

EdTechDisruptive technologies and new business models are expected to significantly transform education systems in the medium andlong term. While EdTech solutions are still in early growth stage, some business models have shown potential to scale and arepromoting affordability, efficiency and accountability, thus helping to address the education crisis in developing countries. EdTechsolutions are reaching students directly, offering more flexible programs with strong links to job opportunities, as well as helping
optimize and further scale the offerings of incumbent institutions.

Project Outcomes – The AIMM system considers the extent of the development gap and uses a gap analysis to classify project contexts
according to the size of the deficit/gap being addressed. For each indicator, the size of the gap is measured in relation to development
goals associated with the sector. Contexts are classified into very large, large, medium or low gap, for each performance dimension.
Development gaps are defined using a combination of qualitative and quantitative benchmarks, which leaves room to consider
context-specific attributes that drive investments in the sector.
COUNTRYCONTEXT

AccessLow Gap

Medium Gap

Large Gap

Very Large Gap- The following are >1 STD
above EM median:- The following are within 1
STD EM median:- The following are < 1 STD
below EM median:- The following are below EM
15th percentile:

Enrollment rates – Share of
students in respective levelof education for age group
Out of school students –Share of children notenrolled in primary or
secondary school
Gender parity index –Female to male students
Youth Literacy rate – Shareof people ages 15-24 who
can both read and write

Enrollment rates – Share of
students in respective levelof education for age group
Out of school students –Share of children notenrolled in primary or
secondary school
Gender parity index –Female to male students
Youth Literacy rate – Shareof people ages 15-24 who
can both read and write

2

Enrollment rates – Share of
students in respective levelof education for age group
Out of school students –Share of children notenrolled in primary or
secondary school
Gender parity index –Female to male students
Youth Literacy rate – Shareof people ages 15-24 who
can both read and write

Enrollment rates – Share of
students in respective levelof education for age group
Out of school students –Share of children notenrolled in primary or
secondary school
Gender parity index –Female to male students
Youth Literacy rate – Shareof people ages 15-24 who
can both read and write

COUNTRYCONTEXT

Low Gap

Medium Gap

Large Gap

Very Large Gap

Quality- The following are >1 STD
above EM median:Student to teacher ratio –Average number ofstudents per teacher
Trained teachers – % ofteachers trained inprimary/secondary
education
Completion rates –Numberof new entrants in the last
grade of respective level of
education divided by the
population at the entrance
Drop out-rate: Cumulative
drop-out rate

- The following are within 1
STD EM median:Student to teacher ratio –Average number ofstudents per teacher
Trained teachers – % ofteachers trained inprimary/secondary
education
Completion rates –Numberof new entrants in the last
grade of respective level of
education divided by the
population at the entrance
Drop out-rate: Cumulative
drop-out rate

- The following are < 1 STD
below EM median:Student to teacher ratio –Average number ofstudents per teacher
Trained teachers – % ofteachers trained inprimary/secondary
education
Completion rates –Numberof new entrants in the last
grade of respective level of
education divided by the
population at the entrance
Drop out-rate: Cumulative
drop-out rate

- The following are below EM
15th percentile:
Student to teacher ratio –Average number ofstudents per teacher
Trained teachers – % ofteachers trained inprimary/secondary
education
Completion rates –Numberof new entrants in the last
grade of respective level of
education divided by the
population at the entrance
Drop out-rate: Cumulative
drop-out rate

“Core outcomes” for education projects include improvements in access and quality of education: (i) access refers to the availability ofquality education services, and in certain cases, to their affordability. Improvements in access will be tracked using the increase (delta)in the number of students enrolled. This will need to be complemented with data on the price segment in which the education institution
operates. Namely, if it targets middle income and upper middle-income households, it is less likely that an expansion will allow forincreased access (as measured by Gross Enrollment Rates) as it will most likely cater to a segment of the population that already has
access to these education services; (ii) and quality will be assessed based on indicators such as faculty qualifications, learner to teacher
ratios, accreditations, relevance of programs, exam results, student retention/graduation rates and employability, among others;
PROJECTINTENSITY

Below Average- The following are < 1 STD
below IFC portfolio medianfor # and % growth in 5 yrs:

Access

Quality

AverageAbove Average- The following are within 1- The following are > 1 STD
STD IFC portfolio median forabove IFC portfolio median# and % growth in 5 yrs:
for # and % growth in 5 yrs:

Significantly Above
Average- The following are > IFC
portfolio 85th percentile for# and % growth in 5 yrs:

Student enrolled – % change
in # of students enrolled incredentialed certified
programs
Students enrolled from atarget group – change in #of students fromunderrepresented groupenrolled in credentialed
certified program
Gender parity –Improvement in student
body gender parity

Student enrolled – change
in # of students enrolled incredentialed certified
programs
Students enrolled from atarget group – change in #of students fromunderrepresented groupenrolled in credentialed
certified program
Gender parity –Improvement in student
body gender parity

Student enrolled – change
in # of students enrolled incredentialed certified
programs
Students enrolled from atarget group – change in #of students fromunderrepresented groupenrolled in credentialed
certified program
Gender parity –Improvement in student
body gender parity

Student enrolled – change
in # of students enrolled incredentialed certified
programs
Students enrolled from atarget group – change in #of students fromunderrepresented groupenrolled in credentialed
certified program
Gender parity –Improvement in student
body gender parity

The following are below
relevant comparator averages:- Learner to teacher ratio –change in student toteacher ratio- Prevalence of full-time staff– increase in full time
dedicated staff in faculty- Accreditation – change inlevel of institutional andprogram-level accreditation- Faculty with postgraduate
qualification – change inshare of faculty withpostgraduate degree- Employment rate within 12
months of graduation –change in employability
score of students graduated

The following are at par withcomparator averages:- Learner to teacher ratio –change in student toteacher ratio- Prevalence of full-time staff– increase in full time
dedicated staff in faculty- Accreditation – change inlevel of institutional andprogram-level accreditation- Faculty with postgraduate
qualification – change inshare of faculty withpostgraduate degree- Employment rate within 12
months of graduation –change in employability
score of students graduated

The following are above
relevant comparator averages:- Learner to teacher ratio –change in student toteacher ratio- Prevalence of full-time staff– increase in full time
dedicated staff in faculty- Accreditation – change inlevel of institutional andprogram-level accreditation- Faculty with postgraduate
qualification – change inshare of faculty withpostgraduate degree- Employment rate within 12
months of graduation –change in employability
score of students graduated

The following are significantly
above relevant averages:- Learner to teacher ratio –change in student toteacher ratio- Prevalence of full-time staff– increase in full time
dedicated staff in faculty- Accreditation – change inlevel of institutional andprogram-level accreditation- Faculty with postgraduate
qualification – change inshare of faculty withpostgraduate degree- Employment rate within 12
months of graduation –change in employability
score of students graduated3

The AIMM methodology considers the uncertainty around the realization of the potential development impact being claimed, making
a distinction between the potential outcomes that a project could deliver and what could be realistically achievable in the project’s
development context. The table below presents the key types of risk factors for operations in the education sector.
PROJECT
LIKELIHOOD

Operational Factors

Assessment
Considerations• Sponsor’s experience and track record in similar projects• Projected growth relative to recent history/capacity• Expansion into markets (e.g. new regions or countries),delivery using new channels or innovative product/design• Growing a new line of business or launching a new business
model• IFC providing AS or is part of systematic WBG engagement in
the country that mitigates operational risks• Project design and involvement of novel complexity,
innovations, implementation/execution risks

Sector Factors• Specific regulatory risks• Supporting government policies and programs• Uncertainty related to returns on investment

Contribution to Market Creation – For the assessment of market creation outcomes, the “market” is defined as the education market
in target countries. Market typologies provide the building blocks in the AIMM system to construct a narrative for how much an IFC
intervention is advancing a market objective. These typologies provide a description of the market gap based on various stages ofdevelopment for a given sector from least developed to most advanced and enable the location of the market before and after IFC’s
intervention. The table below summarizes the characterizations of the market for the two most common market attributes foreducation projects.
MARKET
TYPOLOGY

HighlyDeveloped

Moderately
Developed

Competitiveness− Market is primarily formal
and price competition
occurs, leading firms havebrand recognition and meetinternational standards− Private sector differentiatedfrom public sector,
encouraging innovation in
public institutions− There are many sizeable
players which compete
effectively in terms of
quality and tuition levels− Sophisticated management
practices, right business/academic balance− Ample information available
to stakeholders and primarydecision makers (students
and families) about theavailability of education
options and associatedeffectiveness/quality
enabling informed choice− 1-2 major players operating
at efficient scale− Private sector is a risingchallenger to public sector
for general education− Management practices aremoderately developed− Moderate levels of
information available tostakeholders and primarydecision makers (students
and families) about theavailability of education
options and associatedeffectiveness/quality

4

Underdeveloped− Some private sector
participation in the
education market but few
players− Players are either very small
or informal and are notoperating at scale− Public sector remains
dominant, but private
sector options exist as alegitimate alternative to
public sector− Management practices foreducation institutions are
weak or present limited
levels of sophistication− Some information available
to stakeholders and primarydecision makers (students
and families) about theavailability of education
options and associatedeffectiveness/quality

HighlyUnderdeveloped− Education market is mostly
dominated by the public
sector− Private education market isincipient− Highly fragmented market
with predominantly verysmall or informal players
not meeting minimum
standards− Ineffective management
practices− Virtually no information
available to stakeholders
and primary decision
makers (students andfamilies) about theavailability of education
options and associatedeffectiveness/quality

MARKETTYPOLOGY

HighlyDeveloped

Moderately
Developed− Education market is wellintegrated to other markets
and/or across regions− Well established student
and faculty mobility
programs

Integration

Underdeveloped

HighlyUnderdeveloped− Education market is− Few links between the− Links between the
integrated with othereducation market andeducation market and othermarkets through theeconomic activity
markets are incipient orprovision of relevant skills(insufficient supply of key
none existent.
and/or research acting as
skills, or knowledge, needed − No international education
an enabler for a few specificfor certain economic
platforms.
economic activities
activities to flourish)− No student or faculty− Education market is− Links in education market
mobility programs.
relatively well integrated
across different regions are
across the region, or at aweak, so flow of knowledge
subnational leveland skills is poor
− Growing student and/ or− Limited student or faculty
faculty mobility programs
mobility programs

The market component rating is based on the current market stage and movement along the market typologies. For each relevantmarket outcome, the individual market creation assessment will identify where the magnitude of the movement falls in the
movement spectrum and will support one of the following movement options: “Marginal”, “Meaningful”, “Significant” or “Highly
Significant”. In general, most individual projects are not expected to make a significant and immediate systemic market change, unlessthe project is a pioneer in a non-existent or nascent market. Instead, most projects are expected to have incremental effects on themarket. In other words, it takes more than one intervention to move a market to the next stage. This means that integrated andconcerted efforts are often needed to generate substantial market effects. For example, cumulative World Bank Group efforts overtime will have a stronger effect on markets than non-integrated and non-concerted interventions. Where a project is explicitly part ofa programmatic approach, the expected movement induced by the program should be the basis for the assessment where timeboundmovements, market effects, and indicators are available. Examples of market movements include:
MARKET
MOVEMENT
CompetitivenessIntegration

Marginal

Meaningful

Significant

Highly Significant− Change in competitive market behaviors by promoting the replication of efficient business models− Promote change in market wide acceptance of accreditation through demonstrating viability of business model− Introduce learning methods and curriculum innovation− Deeper and more effective public policy formulation through collaboration with tertiary sector− Enable platforms that connect the market with opportunities through business/education partnerships and entrepreneurial hubs
− Enable support to address structural skills gap to support market connectivity

The market likelihood adjustment follows the principles for the likelihood adjustment for project outcome potential. In general, thelikelihood assessment includes sector-specific, as well as broad country risks that may prevent potential catalytic effects fromoccurring, plus political economy or policy/regulatory risks that may constrain market systemic change. Due to the diversity of market
creation attributes and channels, most of the likelihood factors are expected to be sector, or intervention specific.
MARKET
LIKELIHOOD

Sector Factors•••

Assessment
Considerations•••

Political / Regulatory / Policy Factors

Degree of fragmentation in the market and competitors’ • Government commitments and supporting policies/programs• Government capacity and willingness to implement policies
capacity to replicate
and program commitments
Barriers to entry, regulatory or otherwise• Regulatory scope and capacity, including new regulatory
Strength of the channel for competitive pressures andframework
incentives to adopt innovations
Risks associated to entering new markets
Joint WBG initiative on promoting access to education
Uncertainty about the ability of the labor market to absorb
graduates at wage levels that deliver high returns to thestudent

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