Impact linked financing for Affordable Private Schools (APS)
New Delhi, 12 October 2017: Bengaluru-based school finance company Varthana has received funding of US$3 mn from the Michael & Susan Dell Foundation to expand its School Transformation Program (STP), an initiative aimed at improving the quality of learning in affordable private schools. The total investment in the proposed expansion of the STP is US$ 10 mn, of which the Michael & Susan Dell Foundation has contributed US$ 3 mn through an innovative pay-for-performance debt facility. The innovative facility allows participating schools and Varthana to be rewarded up to 10 percent of the loan amount for improving student learning outcomes by 5 to 10 percent.
Through the STP, Varthana provides debt financing, high-quality assessments, hands-on support, curated vendor connections, and financial rewards – all collectively aimed at driving learning improvements in 337 participating schools across 5 states. Reaching more than 200,000 learners, it is the largest such effort in India.
Rahil Rangwala, Program Director, Michael & Susan Dell Foundation, said, “The Michael & Susan Dell Foundation is committed to improving the educational outcomes of children living in urban poor households. Increasingly poor families in urban areas are enrolling their children in affordable private schools with the hope that they would get access to a high-quality education. The foundation will work with Varthana to ensure that we support and help school leaders to focus on the key drivers of improvement. We are hoping that the demonstrable change will be a win-win situation – not only will schools earn rewards, but students and parents will be better off as well, which is central to our mission.”
Steve Hardgrave, Co-founder & CEO of Varthana said, “Through this unique initiative, the Michael & Susan Dell Foundation is helping Varthana take another step towards enhancing the educational outcomes of children attending affordable private schools. Building on this success, we hope to further expand the School Transformation Program in the coming years.”
Varthana is the brand name of Thirumeni Finance Private Limited, a non-banking finance company (NBFC) dedicated to serving affordable private schools throughout India. Since its founding in 2013, Varthana has served over 3,000 schools spread across 11 states, impacting more than 2 million school students.