In a round that also saw participation from the Aspada Investment Advisors, Chennai-based school financing company Shiksha Financial Services India Private Limited has raised a whopping Rs 6.7 crore from the Michael & Susan Dell foundation, manifesting the foundation’s continued efforts in trying to bring education to the poor.
“We are glad to have Aspada and the Michael & Susan Dell Foundation invest in Shiksha. While education loans for higher education are quite common in India, Shiksha is addressing the vacuum in school financing through an innovative go-to-market solution. Enhancing financial inclusion in the education sector will eventually lead to more inclusive growth. We believe that improved education infrastructure at our schools will eventually translate into enhanced learning outcomes for our children,” says VL Ramakrishnan, Director and CEO, Shiksha Finance.
An Award winning NBFC that facilitates loans in the range of Rs 5 lakh to Rs 1 crore to affordable private schools and smaller loans to middle and lower income families that face difficulties in providing for their children’s education. Working in three states, Shiksha has given out more than 200 loans to educational institutes and with the new funding, they aim to develop on a technology standpoint and expand to new markets. The investment makes Shiksha capable of providing loans to 2300 schools in the next 3 years.
“Our two biggest differentiators are speed and simplicity. We raise money through equity and debt, for which we pay interest. We give loans to parents and to schools, for which we receive interest. We make a profit when our income from loans given exceeds interest on debt, our operating costs and bad debts. In most cases, the interest that we charge is half of what the customer is currently paying,” adds Ramakrishnan.
Prachi Windlass, Education Director, India, Michael & Susan Dell Foundation, commented by saying that “The recent investment in Shiksha supports the Michael & Susan Dell Foundation’s belief that a market-based, scalable financing sector can contribute to improving access to high-quality education for students who are at the bottom of the pyramid.”
“Access to essential services is a key investment theme for Aspada and we view education as a particular area of interest because of its unparalleled ability to unlock opportunities for lower income segments. Operating in a sector which has insufficient formal financing available, Shiksha has a tremendous opportunity to catalyse infrastructure upgradation and capacity increase necessary for schools to meet the demand for a good quality, yet affordable, private education in India.” Added Tom Hyland, Co-founder and Partner, Aspada.