Posted on 22 March, 2020
Zephyr Peacock recognizes the importance of capital
for innovative businesses serving low-income populations. One of Zephyr Peacock’s
investment themes is affordable education and the fund has invested in Shiksha
Finance, a provider of loans to affordable private schools and to students from
low-income families for school education.
V.L Ramakrishnan, co-founder of Shiksha Finance and Pankaj Raina, Managing Director, Zephyr Peacock India write about the role of private capital in catalyzing affordable education.
Click
here to read the full article on ‘Business World
Below is an excerpt from the post which first appeared on
Business World on 22 March 2020:
India is a young country with a median age of 27 with a
quarter of the country’s population of school-going age. Over the next ten
years, more than 300 million children are expected to enter the school system.
A majority of students in India are enrolled in government schools.
Some of the indicators of good quality education include
healthy student to teacher ratio, availability of qualified teachers, adequate
number of desks, access to playgrounds and good academic pass rates. Unfortunately,
a large percentage of government schools in India do not fare well on these
parameters.
Government spending on education, at 3.8 per cent of GDP, is
significantly lower than in other large economies. Many government schools lack
basic infrastructure such as desks, blackboards, libraries and playgrounds. A
recent study across 13 states in India revealed that more than a third of the
schools lack functioning toilets. Lack of serviceable toilets contribute to
greater absenteeism and high drop-out rate of students, particularly girls. The
K-12 segment in India witnesses close to 45 per cent drop out rate. Government
schools also suffer from teacher absenteeism and poor quality of instruction.
With the Centre and the State governments continuing to be constrained in
budgets for improvements in education infrastructure, it is unlikely that the
quality of government schools will improve in the near-term.
Over the last decade, affordable private schools (APS) have
emerged as a superior alternative to government schools. APS charge monthly
tuition fees in the range of Rs 550 to Rs 3,500. More than 110 million children
are enrolled in private schools (2015-16, U-DISE). This number is expected to
increase multi-fold over the next few years. India has approximately 700,000
APS and the number is expected to continue to grow. Unfortunately, these
schools face their own set of challenges.
Click here to read the full article on ‘Business World
Zephyr Management is a global emerging markets investment manager, specializing in the creation and management of highly focused private equity funds
Since its inception in 1994, Zephyr has sponsored and/or managed 26 investment funds in both public and private securities markets representing approximately $1.2 billion in combined commitments and assets under management
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