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LGT Venture Philanthropy (LGT VP) is pleased to announce a new portfolio organization in India

Varthana has the potential to create a significant positive impact on the education of India’s poor. Over 100 million Indian children depend on low-cost private schools, however these schools have no access to funding from traditional financial or micro-finance institutions. And this is where Varthana comes in: by providing tailored loans and support to low-cost private schools. Varthana not only helps these schools to grow and expand, but also contributes to a high standard of quality education that is affordable to an increasing number of India‘s low income families LGT VP’s engagement: Alongside other co-investors, LGT VP has provided Varthana with funding in the seed investment round. “With this investment, Varthana will be able to impact more than 100 schools and 50‘000 students while building a strong foundation for further growth in the coming years”, says Steve Hardgrave, Co-Founder and CEO of Varthana. The company’s operations started in January 2013 in Bangalore.

Background:
Only a fraction of the Indian population can afford high-end private schools. Government schools and high-end private schools dominate the national dialogue on education, while India’s destiny is actually tied to the legions of locally managed, low-cost private schools. However, these affordable private schools lack access to capital. They rarely meet the traditional lending requirements of formal financial institutions. On the other hand, loans offered by micro-finance institutions are not large enough for school infrastructure projects while informal money lenders have extremely high interest rates. This lack of alternative, adequate financing has constrained the growth and innovation of affordable private schools.