Shiksha Financial Services India Pvt. Ltd, a Chennai-based non-banking financial company that focusses on educational loans, has raised Rs 30 crore (approximately $4.23 million at current exchange rates) by issuing non-convertible debentures (NCD)
The NCD issue was picked up by debt platform Northern Arc Capital and the Netherlands-based impact investment fund Triodos Investment Management, Shiksha said in a statement on Wednesday.
VL Ramakrishnan, chief executive officer at Shiksha, said the debt financing would help the firm to scale up faster and grow its books. “Our goal is to support the educational needs of 200+ million school student population in the country,” he said.
Separately, Northern Arc managing director and CEO Kshama Fernandes said the education financing sector was emerging as an important focus for the firm, and that investors were comfortable to tie-up with companies such as Shiksha because of the growth potential in the segment.
Sagar Thakar, senior investment officer at Triodos Invesment Management, said the debt funding would also help Shiksha expand the outreach of its services to semi-urban areas.
Founded in 2014, Shiksha Financial provides loans in the range of $500,000 to $10 million (Rs 5 lakh to Rs 1 crore) to affordable private schools, which use the loans for education infrastructure development.
The company also provides loans to middle and lower-income families so that they can finance the school fees of their children. The loans, secured through social collateral, can be paid back through a repayment schedule. The firm currently operates in three states.
In February, the company received Rs 55 crore (around $7.7 million) in a round of funding led by private equity firm Zephyr Peacock. Existing investors Aspada and Michael and Susan Dell Foundation also participated in that round.
In November 2016, Shiksha secured about Rs 6.7 crore ($1 million) from the Foundation and Aspada.
Northern Arc, Triodos
Chennai-based Northern Arc Capital has over 150 employees spread across five offices in the country, and has so far executed over 500 capital market transactions. The company also has an Alternate Investment Fund vehicle, known as Northern Arc Investment Managers. The three-year-old business has seven funds under its management with a cumulative AUM of Rs 1,200 crore.
In March, it secured a fresh investment of Rs 910 crore (around $130 million) from a clutch of institutional investors, including IIFL Special Opportunities Fund and Standard Chartered Private Equity as well as Affirma Capital.
Triodos Investment Management is a wholly-owned subsidiary of Triodos Bank NV, which is based in the Netherlands and has offices in Belgium, Germany, the United Kingdom and Spain. The investment arm of the bank has been making impact investments for 25 years and is present across Asia, Africa, Latin America and Eastern Europe. It is also among the earliest institutional investors in India’s financial inclusion segment.