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Education Sector Exclusive NBFC ISFC to get $30 Mn from IFC of World Bank Group

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International Finance Corporation (IFC), a member of the World Bank Group, will invest $30 million in Indian School Finance Company (ISFC), an India’s first & only Non Banking Finance Company (NBFC) providing loans exclusively to Schools, School entrepreneurs and School Eco-space.

The investment will be mix of both equity and debt, with up to $15 million in equity and the same amount in debt. The funds will enable ISFC to help schools expand their existing facilities and improve their current infrastructure, reported Business Standard.

ISFC, which started its operations in December 2008 from Hyderabad, provides retail loans to affordable private schools, colleges, coaching centres, educational small and medium enterprises (SMEs) and teachers. The objective of ISFC is to assist the Schools and other education institutions in capacity building through infrastructure improvements, thereby enabling students to access quality education.

ISFC caters to entire education segment, with focus areas including Affordable Private Schools, Private Schools, Play Schools, Private Degree and Vocational Colleges, Coaching Centers, Teachers and SME catering goods and services to Education segment.

The loans provided by ISFC are typically extended for improvement in school infrastructure facilities such as construction of additional floors/wings within the existing school premises, setting up of computer labs/facilities, science laboratories, adding basic amenities, providing finance for implementation of new teaching methodologies like digital classrooms, experiential learning and other similar facilities, leading to a qualitative and quantitative improvement in their delivery model.

IFC, which is headquartered in Washington, is an international financial institution that offers investment, advisory, and asset-management services to encourage private-sector development in less developed countries.

Last year, one of the leading gold finance NBFCs in India, Manappuram Finance, has acquired an 85.39% stake in ISFC for Rs 212.20 crore (around $31 million), which was followed by concerns raised by the Reserve Bank of India over the company’s shareholding pattern and management changes that would take place post the acquisition deal.

Last July, Gray Matters Capital (GMC) sold its entire 81.92% stake in ISFC to Manappuram Finance Ltd. Caspian, an impact focused investor which has advised ISFC since its inception also exited the Company, selling its 3.48% stake.

Currently, Gray Matters Capital & affiliates holds 81.9% stake in ISFC, while Caspian Advisors holds 3.5% and 14.6 % of ISFC’s shares are with its key management and employees.

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