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[Portfolio News] The struggle and survival of Affordable Private Schools during pandemic

Posted on 01 October, 2020

Shiksha Finance is a Zephyr Peacock portfolio company that provides loans to affordable private schools (APS) and to students from low-income backgrounds in India. Shiksha’s founders, V.L. Ramakrishnan (Ramki) and Jacob Abraham, comment on how APS are dealing with the impact of COVID-19.

Click here to read the full article on “Higher Education Digest”

Below is an excerpt from the post that first appeared on Higher Education Digest on 1 October 2020:


During COVID-19, Affordable Private Schools (APS) in India are struggling to upgrade their infrastructure and to adapt to a new reality. Shiksha Finance, a non-bank finance company (NBFC) founded by V.L. Ramakrishnan (Ramki) and Jacob Abraham in 2014, is one of the only three lenders that serve the financing needs of APS in India. The company has financed over 2,500 schools across Tamil Nadu, Pondicherry, Telangana, Andhra Pradesh, Karnataka and Maharashtra. In the last four months, Ramki and Jacob have personally met hundreds of parents and school heads. Now, they are very well attuned to the concerns of schools, teachers and parents, and are well informed on the challenges facing APS and how they are planning to restart operations. In an interaction with Higher Education Digest, Ramki and Jacob talk about the struggles of APS to upgrade their infrastructure and to adapt to a new reality, issues faced by parents of students from low-income families due to the pandemic, support of Shiksha Finance for the changing needs of schools as well as parents, and many more.

Despite being a viable business with proven profitability, what are the significant challenges for Affordable Private Schools (APS) in India?

Ramki: Affordable Private Schools (APS) have emerged as an important alternative to government-run schools in India due to their superior quality education. However, APS have their own sets of issues. These schools face difficulties in setting optimal school/tuition fees due to government regulations. They also require funding to improve their infrastructure. APS are also faced with the three major challenges of running any school – unavailability of qualified teachers, delays in fee payments and management of students’ commute to and from school


How are APS adjusting to the COVID-19 crisis and what behaviour can be expected in the post- COVID world?

Ramki: In our experience, we have seen that APS are struggling to cope with COVID-19 as several parents struggle to pay tuition fees. In the post COVID world, APS will focus more on building infrastructure for digital education. The resumption of “brick and mortar” or traditional offline teaching will take place with adequate social distancing norms. It is likely that a shift-based education system will be introduced.


The role of digitization and technology in education today – what is the level of preparedness of APS? What are their common problems?

Jacob: As a lot of APS are struggling to stay afloat due to the pandemic, there has a general resistance to change and technology. APS are faced with various challenges concerning digitization. Firstly, the school administration does not have enough knowledge about technology and its uses for education. They are apprehensive of deploying technology for education as they do not want to incur high costs. A lot of the schools believe that the pandemic will not last long, so they are hesitant to invest in a short-term problem. Another problem faced by APS is the fact that the majority of the teachers are still adjusting to the new normal of imparting knowledge through electronic devices like computers, smartphones and tablets. Teachers doubt the effectiveness of online education versus traditional face to face teaching. APS also face issues from an infrastructure point of view, like the availability of hardware and internet connectivity.


Are teachers in APS well equipped to handle the shift in teaching online? What kinds of training for skill development is required?

Jacob: Teachers in APS are not well equipped enough to handle the shift in teaching online. They require soft skills training to get them acclimatized to the new normal. Teachers are faced with the challenge of controlling a classroom remotely and holding the attention of students. Teaching complex subjects online is difficult for them especially when interactive sessions online are often interrupted for connectivity related issues.

Teachers are used to quizzing students on current topics being covered and penalizing students in case of non-attention or bad behaviour. Due to remote teaching, these measures are often not possible. Teachers are also unable to take “surprise tests” or on spot exams to evaluate their students’ progress. A lot of the teachers we have spoken to also say that they are struggling to juggle their professional and personal lives, as online lessons from home have distorted school timings.

Click here to read the full article on “Higher Education Digest”

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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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