Chennai-based Shiksha Finance provides working capital loans to educational institutions and loans to parents for uninterrupted school education of their children.Tarush Bhalla
Chennai-based Shiksha Financial Services India Private Limited on Friday said it has raised Rs 55 crore from Zephyr Peacock India Growth Fund and existing investors Aspada Investment Company and Michael & Susan Dell Foundation.
Incorporated in 2014, the education finance company provides working capital loans to educational institutions, and loans to parents for the uninterrupted school education of their children.
According to Founder Director and CEO VL Ramakrishnan, the funds will be used to finance the company's growth plans and strengthen the management team. With the current fund raise, Shiksha Finance is also looking at expanding its distribution presence to new states, including Maharashtra.
The company had raised its Series A round of Rs 21 crore in 2017, and continues to work on new product offerings within the education finance sector. Speaking on the growth Shiksha Finance has achieved, VL Ramakrishnan said,
“Shiksha has cracked an innovative lending model centered around the education sector and has disbursed 1700 business loans to education institutions and 15,300 school education study loans to parents. The company is now present in 40 locations across five states with cumulative disbursement of Rs 170 crore.”
According to the company, its student loan product is designed to ensure uninterrupted education for children. The product’s perpetual design enables a child to continue education, eliminating the fear of drop-outs on account of lack of access to financial resources. The company’s credit assessment model has been developed to address the needs of customers who have income, but are not able to produce financial records like balance sheets and income tax returns.
Speaking on the investment, Pankaj Raina, Managing Director, Zephyr Peacock said,
“Shiksha is uniquely placed in the education financing ecosystem as a lender to both schools and students. Its product offerings help improve the quality of affordable private schools and help children from low-income backgrounds access quality education. Access to quality education is an aspiration for most lower and lower middle income households in India and we believe this is a multibillion dollar market.”
Kartik Srivatsa, Managing Partner, Aspada said, “We are delighted that Shiksha’s unique business model has demonstrated a sustained ability to raise both debt and equity at scale. Equity infusion in a challenging market environment is a strong reaffirmation of the fundamentals of Shiksha’s business model and the role the company plays in offering much needed capital to India’s educational institutions.”
In November of 2016, Shiksha Finance had raised $1 million (Rs 6.7 crore) from the Michael & Susan Dell Foundation in a round that also saw participation from Aspada Investment Advisors.
Vikas Verma, Director at Michael & Susan Dell Foundation (MSDF) said on the current investment,
“We are delighted to see the progress that Shiksha has been making since 2016 and are confident that the Shiskha team will continue to build on the progress that it has made till date.”