The Michael and Susan Dell Foundation has announced its investment of Rs. 6.7 crore along with Aspada Investment Company in Chennai-based school financing company Shiksha Financial Services India Private Limited.
A pioneering non-banking financial company (NBFC), Shiksha Finance, provides loans in the range of Rs. 0.5 to 10 million to affordable private schools. These loans are used by the schools for education infrastructure development.
Apart from loans to schools, Shiksha Finance also provides loans to middle and lower-income families to finance school fees of their children. The loans, secured through unique social collateral, can be paid back through a manageable repayment schedule.
This investment reiterates the Michael and Susan Dell Foundation’s commitment to increasing access to quality education for the poor. While the foundation has invested in market-based solutions to increase the supply of high-quality service providers for the affordable private schools, the schools still struggle with the availability of finance to invest in the improvement of infrastructure and quality.
Shiksha is a compelling solution to improve education quality in the sector and become a full-service solution for the schools and parents of the children studying in these schools.
Shiksha will use this round of funding to further strengthen its technology backbone, launch more innovative products and expand into newer markets.
This investment will enable the organization to provide loans to 2,300 schools over the next three years.
“We are glad to have Aspada and the Michael and Susan Dell Foundation invest in Shiksha. While education loans for higher education is 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,” said Director and Chief Executive Officer Shiksha Finance, V L Ramakrishnan.
“The recent investment in Shiksha supports the Michael and 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. We hope that Shiksha’s offering will develop into a platform through which schools are able to access quality linked education products and services, and get financially rewarded for improving quality,” said Education Director India Michael and Susan Dell Foundation, Prachi Windlass.
“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 catalyze infrastructure up-gradation and capacity increase necessary for schools to meet the demand for a good quality, yet affordable, private education in India,” said Co-founder and Partner Aspada, Tom Hyland.