Need a loan to expand a school? Varthana can extend a helping hand

One look at Varthana’s website and you have the entire background to their venture in front of you – India’s large student population, the inherent belief of Indian parents in education, unaffordable private schools, poor quality of public education, limited access to capital to improve infrastructure and the quality of education in the small private schools.

That is where Varthana comes into the picture. The finance lending organization, founded by Steve Hardgrave and Brajesh Mishra, provides access to loans for entrepreneurs working towards improving the quality of education for low-income groups. In conversation with Steve, who, together with Brajesh, has previously collaborated on setting up another school finance company, the Hyderabad based ISFC :

Loans and beyond

The founders are driven by their motivation to improve the quality of education accessible to India’s large, low-income population with a scalable model. The beginning point of their commitment is the low cost and easy access loans they provide to achieve this end. “We also make sure to follow up with the schools, to ensure that the planned project is implemented successfully”, says Steve, of their involvement in the schools.

While loans are the starting point of their relationship with schools, the founders also want to make available other resources like technology, curriculum, training and access to long term strategic partners. Steve explains this, “there are many organizations providing answers to these challenges, and in many cases someone is needed to simply connect the dots.”

Varthana has relationship managers who personally visit the schools to identify their needs. Most of the marketing though, Steve says, is through word of mouth, which he emphasizes ‘is the best entry point’ to the organizations.

Launched in January this year, Varthana has already provided 30 loans and their team has grown to 10 members. Speaking of their reach so far, Steve says, “given the short time, we are quite happy with the response from the market and our early growth. We are honored to partner with some incredible entrepreneurs and cater to schools that require financing to improve and expand their operations”.

The duo monetize their venture through interest charged on the loans.

Way ahead

While they are already making headway into reaching out to schools besides their loan requirements, Steve says they are looking to partner with other organizations interested in improving education for India’s masses. Currently, they partner with organizations like Milaap, an online platform enabling individuals to lend to India’s working poor, Gooru, a free search engine that helps teachers discover topic-relevant web resources and organize them into learning playlists, and iEinstein, which works with for-profit, non-profit and governmental agency to enable an ecosystem of affordable 21st century eLearning in India.

While the duo are aware of their own challenges of scaling up, but like a true social entrepreneur, Steve concludes saying, “the real heroes are the school owners and the students/families who are making huge sacrifices to invest in their own education.”

[This column is sponsored by Bihar Innovation Forum– one of a kind platform that aims to identify, celebrate and scale up rural livelihood innovations]