Students in developing nations learn a lot thanks to small loans

Elizabeth Davis looks after a granddaughter and a niece, paying private-school fees for both because, she says, "in public schools, the children are too many in a class, [so] they don't get the chance to be taught properly."

Paulina Ekumah (no relation to Daniel), is more specific about what she hopes her investment will mean for her children: "I want to get at least one doctor and a lawyer or engineer."

Those are the kinds of stories heard over and over by Mr. Tooley. "Parents, frustrated with what they see in the government schools, scrimp and save to put their children into private schools and see just a huge difference, and suddenly hope is restored that their children will do better in their lives and the development process will continue," he says.

With teacher absenteeism as high as 50 percent in public schools in parts of India and other developing countries, it's no surprise that parents might prefer private schools – even those not recognized by the government, says Henry Levin, director of the National Center for the Study of Privatization in Education at Columbia University in New York.

Mr. Levin notes, however, that this isn't necessarily the only, or the best, solution. For one, "it takes some pressure off the government, when the government ought to be focusing on not only [school] places, but on making the kids successful."

One alternative he's seen is to provide incentives and low-cost monitoring to ensure public school teachers actually show up and teach. An experiment in India by researchers at the Massachusetts Institute of Technology found that when teachers were asked to be photographed at the beginning and end of each day with their students on a special time-stamp camera and had their salaries tied to their attendance levels, school achievement improved.

Tooley's research found that teachers in private schools for the poor tend to have lower credentials and be younger, but they "are working hard, they are keener, and they're achieving better results," he says. In a study of 24,000 students, Tooley found that after controlling for background variables, the private-school students outperformed public school peers on key subject tests. And the private schools spend about one-fifth or less of what the public schools spend per student, he says.

Since the public-sector performance levels tend to be low as well, however, Levin notes that those may not be sufficient benchmarks for ensuring a good education.

However the quality issue plays out over time, there's no doubt that entrepreneurs like Adamah are meeting a demand from parents, whose school fees help create a livelihood for her, as well as creating jobs in the community as the school expands. But the endeavor goes beyond the bottom line. "Even before I had children of my own, I would gather the other kids in the neighborhood as they were running around and I would bathe them," Adamah recalls with a smile. "I love children."

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