Financing Access to Quality Education for Underserved Communities Across India
- Leela Vosko
- Dec 21, 2022
- 3 min read
Varthana is a regulated Non-Bank Financial Company (NBFC) that seeks to bridge the education financing gap for low income populations in India by financing the growth of the country's Affordable Private Schools (APS). In addition to being affordably priced, APS are based in local communities, which is convenient for parents who cannot afford local transportation and most offer classes in English. Today, 200,000 Affordable Private Schools in India educate approximately 92 million students (around 30% of all school-aged children in the country).[1]
Varthana’s loans and insurance products enable APS to finance improvements for their schools, like campus expansions and renovations, teacher training, the purchase of computers, and the development of new learning programs. In addition to financing, Varthana also offers a digital fee collection tool, as well as financial consulting solutions, and supplementary educational programs, like worksheets and videos for Math and English. The typical APS accessing financing through Varthana operates a school that charges $5 to $25 per month in fees. To date, Varthana has financed nearly 4,500 schools and today educates more than three million students and employs more than 100,000 teachers.
The Impact of COVID-19 on Affordable Private Schools in India
India has one of the largest school systems in the world, but government-mandated school closures in response to the pandemic persisted for a longer period of time relative to other countries. Under-resourced APS were particularly hard-hit.
Many lacked the infrastructure and financial capacity to seamlessly switch to providing its students with online education. Furthermore, many parents could not afford a laptop to support online learning programs, and others were reluctant to pay for tuition to schools that were not physically open.
To support its borrowers during this period, Varthana extended moratoriums and working capital to schools in need. The company also provided non-financial support through its “Unlock Schools Program” for families that could not afford or did not have access to a computer, supplying worksheets to school owners, teachers, and parents for English and Math. Varthana also advocated for schools to adopt online fee collection software as the majority of APS fee collection is still obtained through cash. They also implemented enhanced engagement programs with students’ parents, many of whom found online classes to be ineffective.
Despite short term challenges, Varthana’s school owners remain optimistic about the long-term outlook of their sector. Many are (slowly but steadily) adopting digital solutions, implementing uninterrupted learning models, and enhancing parent engagement to offset any unforeseen events that could impact their schools in the future.
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