Private sector engagement and innovative financing for education
Education is a public good, and the provision of education is a collective endeavour and shared responsibility among various stakeholders from both public and private spheres. As the financial gap to achieve the SDG 4 targets by 2030 widens, contributions from all actors and significant efforts across multiple aspects of education financing are essential.
In addition to domestic resources, including those from private households—the largest yet insufficient source of education funding—and international aid, private sector contributions are crucial. Engagement by private sector actors extends beyond private schooling, with diverse players addressing capacity and impact gaps in education at national and global levels. Private sector actors contribute as providers of capital, suppliers of goods and services, ecosystem supporters, and advocates. They bring additional capital through innovative financing mechanisms and financial investments, enhance education quality, strengthen ecosystems with improved data management or governance practices, and promote access and inclusion through bridging programmes.
Public and private actors are increasingly exploring innovative financing to unlock new funding for education in low-income and lower-middle-income countries (LICs and LMICs). These efforts leverage public funds through public-private partnerships, improve the efficiency and effectiveness of traditional mechanisms, and foster meaningful impact measurement. While the overall share of private sector investment may remain limited, there is optimism about developing scalable mechanisms and evidence with catalytic potential for public funding.
The SDC upholds every person’s right to education and recognises the state as the primary duty-bearer for education, with the private sector playing a complementary role. The SDC’s engagement and collaboration with private actors is guided by the shared objective of improving education inclusion, quality, relevance, and access to the labour market, combining efforts for impact-driven development interventions. The SDC is actively involved in policy dialogue, including through its partnerships with organisations such as the Global Partnership for Education (GPE). It also explores opportunities with the private sector and foundations such as the Impact-linked Fund for Education to enhance the performance and governance of education systems, promote shared responsibility in the provision of education, and develop innovative financing mechanisms
Key documents
Our projects
- ILF for Education, co-financed by SDC and Jacobs Foundation, which offers SIINC, Impact-Linked Loans, Impact-Linked Payments for high-impact organizations providing inclusive and equitable education opportunities globally
- SDC’s research project Innovative Financing in Education to leave no one behind (IFE-2-LNOB)
- Swiss Cantonal Banks Education Fund