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Education-focused non-banking finance company (NBFC) Varthana has raised $15 million (~Rs 120 crore) from BlueOrchard Microfinance Fund, managed by impact investor BlueOrchard.

This marks BlueOrchard’s second capital infusion into Varthana following $10 million raised in April.

The funds, raised under the external commercial borrowings framework, will support Varthana’s lending portfolio, offering financial aid to private schools and vocational students in Tier II and III cities for infrastructure development and skill-based learning programmes.

“This facility represents BlueOrchard and Varthana’s mutual commitment and recognition of inclusive education’s crucial role in achieving sustainable development, and uplifting the future generations of India,” said Yan Kit Lee, Head of Originations, Asia, at BlueOrchard Investments (Singapore) Pte Ltd.

Varthana, a provider of loans to affordable private schools and students pursuing higher education in India, claims to have financed more than 11,000 affordable private schools and facilitated over 16,500 loans for school expansion and renovation. 

Operating across 16 states and union territories with 40 branches, Varthana also serves Tier III and IV cities.

“These funds will allow us to reach more schools and families, enabling them to access the resources they need to create impactful learning environments,” noted Steve Hardgrave, CEO of Varthana, in a statement.

The NBFC provides loans to private schools for various expenditures, including furnishing campuses, equipping labs, implementing CCTV, upgrading to smart classrooms, and acquiring vehicles. It also provides student loans to candidates looking to cover tuition fees and other expenses for degree and certification courses.

In March, Varthana acquired the school loan portfolio of Indian School Finance Company, an education-focused lender, for Rs 126 crore.

In January, Varthana secured $14 million from Blue Earth Capital to expand its financial support to a broader network of affordable private schools across India. It has also received funding from Omidyar Network India and ChrysCapital.