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Northern Arc Capital, a leading debt platform for non-banking finance companies (NBFC), on Wednesday announced that the company, along with the Netherlands-based Triodos Investment, has made an investment of Rs 30 crore in non-convertible debentures (NCDs) issued by Chennai-based education finance company Shiksha Financial Services.
In a press statement, Northern Arc Capital said it has been keenly tracking the space, identifying high quality institutions and have cumulatively enabled over Rs.750 crore of debt to the sector till date.
Founded by V L Ramakrishnan and Jacob Abraham, Shiksha Financial Services is an education financing NBFC with a mission to enhance access to education financing for affordable private schools and parents of the school going students.
At present, Shiksha Financial is operational in five southern states, serving more than 2,000 schools and over 2.2 million students with a total asset under management of Rs. 165 crore. The company has some marquee investors like Michael and Susan Dell Foundation besides Aspada Investment and Zephyr Peacock India.
“Education financing is emerging as an important sector of focus at Northern Arc. The financial inclusion landscape is expanding and we are noticing opportunities beyond traditional sectors like microfinance,” said Kshama Fernandes, MD & CEO of Northern Arc, the press statement quoted.
Shiksha will use the funds for growing its loan portfolio, to deepen presence in South India and expand to new states like Madhya Pradesh, Gujarat and Rajasthan.
“Our goal is to support the educational needs of 200+ million school student population in the country. We see a massive opportunity to expand across the country and debt financing will play a critical role in enabling us to scale faster and grow our books,” V L Ramakrishnan CEO of Shiksha was quoted in the statement.
Noting that the latest NCD transaction is among a very few deals in the sector that is backed by a foreign institutional investor, Sagar Thakar, Senior Investment Officer at Triodos Investment Management said “With our loan, Shiksha can further expand its outreach, especially in semi-urban areas.”
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