PAKISTAN has failed to make any significant progress in the education sector over the last several decades due to outdated policies and inadequate spending on the critical sector.
The government needs to think outside the box and adopt innovative strategies for quick and fast-paced development of the sector. A new and profitable model of ‘Education Development Bank’ (EDB) can be a stepping stone in this regard.
Currently, the educational institutions in the country are using the services of private commercial banks where funds meant for educational activities are used for non-academic activities. No commercial bank finances any education-related activity in Pakistan despite the fact that a huge proportion of society is connected with the education sector in one way or another.
Due to the meagre amount of funds available for public-sector educational institutions, the quality of education continues to slide downward, especially in rural and semi-urban areas where monitoring systems rarely exist.
Integration of latest information and instructional technologies, new laboratories and training centres, and new or renewed infrastructure are some of the key elements needed, but most of the educational institutions do not have the resources to meet the financial cost of any such undertaking.
In traditional democracies, banks and states are run on the basis of different principles. Public-sector institutions normally revolve around the not-for-profit objectives, while commercial banks revolve around profit alone. However, the proposed EDB, a hybrid model, will be a win-win entity on both counts.
A state-owned but autonomous EDB can be established with a mandate to operate in the education sector alone, and provide all banking facilities and services to its customers on ‘special’ rates. The initial funding for the new bank will have to be provided by the state.
All education-related funds, local and foreign, are to be managed, maintained and transacted through EDB only. The EDB is to be mandated to open, maintain and manage all kinds of bank accounts for individuals and companies that are connected with the education sector, including teachers, students, administrators, schools, colleges, universities, and other similar institutions.
It is to extend loans and incentives to its customers on comparatively subsidised mark-up rate for educational development projects.
These projects may include, but not limited to, the establishment of new educational institutions, like schools, colleges, universities, vocational training centres, as well as for the renovation, reconstruction and expansion of existing institutions. Loans will also cover scholarships and financial aid to the deserving students, purchase of laboratory equipment, teaching aids, teachers training programmes, new technologies — both hardware and software — and many similar activities.
The prime objective of the proposed EDB shall be to strengthen the education sector.
The education system of Pakistan needs an overhaul and this is not possible without adequate funding and resource allocations for the sector. To cater to the financial needs of the sector, an independent corporate body, like the EDB, can become an efficient and sustainable source of promotion, strengthening, development and sustenance of educational institutions and related businesses.
Prof Muhammad Ahmed Farooqui
Published in Dawn, June 24th, 2021