A school principal requires adequate competencies to provide effective leadership to manage teaching and learning processes at school. This study examines the effectiveness of an inter-school collaboration on the principals' competencies in a rural area. It is believed that the inter-school collaboration has a significant impact not only on educational but also on social aspects. This study draws insights into ways to improve the competencies of the principal in school management using an action research approach. It evaluated the impact of an intervention by implementing a partnership between schools. One level A accredited school and three level B/C accredited schools in Kebumen, Central Java, Indonesia, were selected to participate in the inter-school collaboration. Within the collaboration programme, the level B/C accredited schools actively seek opportunities to improve their teaching and school management under the guidance of their counterparts from level A accredited schools. Several actions such as benchmark, workshop and training were performed during the intervention phase. The research results indicate that the partnership model optimises the competencies of principals of primary schools in Kebumen Regency, especially their managerial, entrepreneurship and supervision competencies and this has led to improvement in the competencies of teachers and school administrative personnel, as well as that of their educational service.