We are proud to announce that PG Impact Investments has made its first investment in the education sector following the disbursement of a loan to Thirumeni Finance Private Limited (“Varthana”), a leading non-bank financing company that focuses on lending specifically to affordable private schools with a mission to improve access to quality education in low-income communities in India.
India has experienced a tremendous social and economic growth over the past few decades. However, the public-school system has not kept pace on that development, exacerbating a thirst for education experienced by the largest school-aged population in the world. An emerging sector of private schools delivering top-notch education at affordable prices is thriving to meet the growing demand of over 270 million students. These schools often face difficulties in accessing financing to scale their operations. To increase the capacity and resources at these good quality affordable schools, Varthana provides financing solutions tailored specifically for these institutions – this allows the Varthana-financed schools to invest in technology, new classrooms and even transport systems to help students reach their schools. This not only impacts the students attending Varthana-financed schools, but also increases competitive pressure in the wider private school market, driving lower quality institutions to improve the quality of education.
Varthana’s client schools cater specifically to the lower end of the socio-economic spectrum, with fees in the range of USD 5-40 per month. These school entrepreneurs with credibility in their communities typically launch schools using their personal finances and land / property and tend to run out of capital – financing from Varthana allows them to expand their infrastructure, invest in teacher training and introduce new learning methods into their classrooms furthering access to affordable education.
To date, Varthana’s loans have assisted schools who in aggregate teach 3.0 million students and employ over 102k teachers. PG Impact Investments’ debt investment will support the company’s continued geographic expansion.
Urs Baumann, CEO and co-founder of PG Impact Investments, stated: “For our first investment in the education space, we are humbly thrilled to partner with Varthana and be a part of its mission as we share the belief that good quality, affordable education has a tremendous potential to transform the lives of children living in poverty. We are very impressed with Varthana’s unique high-impact strategy with a history of strong performance and a demonstrated ability to respond and adapt to the Indian operating environment and are looking forward to supporting the institution in placing thousands of children into affordable private schools where they will continue to thrive”.
Steve Hardgrave, CEO and co-founder of Varthana, said: “We are extremely grateful for PG Impact Investments’ debt investment in Varthana. It is a pleasure to partner with an institution that believes in the power of using commercial capital to address pertinent social issues such as education. This investment will help us continue to expand our reach throughout India and we look forward to a long and fruitful partnership with PG Impact Investments”.
About PG Impact Investments
PG Impact Investments was founded in 2015 with the vision that private investment, innovation and entrepreneurial talent can provide solutions to the challenges faced by our society, as well as create sustainable growth. PG Impact Investments is a private sector, mission-driven, global investment firm specializing in investment solutions aimed at delivering financial returns as well as creating a positive social and/or environmental impact. It manages investment strategies for an international clientele of professional investors who are seeking investment solutions that offer market-rate returns, while also helping to address pressing social or environmental challenges. All profits from the business activities of PG Impact Investments are transferred to PG Impact Investments Foundation. The Foundation supports social initiatives and social businesses ventures that otherwise would not receive funding through commercial investors or investment funds. Whilst being independent from Partners Group, PG Impact Investments entities are backed by Partners Group and its employees and benefit from the global infrastructure, investment know-how and specialist resources of this leading global private markets investment manager.
Varthana aims to meet the needs of affordable private school owners by providing loan capital so they can expand their infrastructure, invest in teacher training and introduce new learning methods into their classrooms. Founded in 2012, the company endeavors to be a school’s most valuable and long-term partner as it grows and improves to reach its full potential. It accomplishes this by being agile, responsive and supportive while ensuring minimal disruption in the school’s daily routine. Varthana operates out of over 30 branches across 13 states in India and has served over 5’600 schools since Inception.