In the education loan space what makes Avanse different from other players including public sector banks?
At Avanse we take every effort to ensure that a deserving student gets the funding he/she needs. We believe that socio economic background is not the only criteria for student success and the same has been proven by research as well.
Our student led approach also ensures that deserving students get the financial support they need irrespective of their economic status by focusing on the factors like academics background, eligibility criteria, pedigree of the course and institute and future employment opportunities.
Many of the banks and other financial institutions, provide loan only for the tuition fees. However, Avanse provides finance covering complete cost of education including living and other expenses, exam and library fees, books and equipments (computer) and/or travelling expenses without putting a cap on the amount that can be borrowed.
What is your criteria for sanctioning education loans both for students pursuing education in India and those seeking to study abroad? Or are your loans restricted to students planning to study overseas?
Avanse takes a holistic student centric approach to support a student’s desire for higher education. We look at student’s past academics, the program that the student wishes to pursue, the institute where he/she has been admitted and its placement record and the future employability potential of the student.
Avanse provides loan for education across all levels in India and abroad – school education, undergraduate course, postgraduate course and executive education. Additionally, Avanse also provides loans to educational institutes in India to fund their growth and working capital needs. Avanse in partnership with Early Salary also helps parent’s fund their child’s school fees digitally in less than 5 minutes.
What is the average size and maximum loan you provide and for what duration? Are the loan amounts on the rise?
The amount of education loan that one can provide to students depends totally on the amount required for completion of the course. While there is no upper limit to the loan amount we provide, our average ticket size across both domestic and international programs is ~ 13-15 lakhs.
When you talk about financial flexibility in your educational loan package what does it signify? Do your loans require some kind of collateral?
Avanse offers tailor made solutions for students on the basis of the students academics, the course, institute and the country where he / she has been admitted, and also incorporates incidental expenses beyond the tuition fees.
Education Loans are both secured and unsecured loans depending on various factors like academics background, eligibility criteria, pedigree of the course and institute and future employment opportunities.
Recent media and banking sector reports indicate that education loans are becoming a major source of NPAs for banks. How different is Avanse experience on this front?
Avanse as a specialized Education Finance company views this trend as a big opportunity to focus on the right student profile. We scan every application through an ‘Employment Predictability Model’. This model has been developed to derive the future income of the student and takes into consideration critical factors like Entrance Test Score, Academics (U/G results), Work Experience, the stream, course and University where the student has secured admission and combines it with data about the employment history of the university and program.
Therefore, Avanse evaluates not only the student but also colleges and courses for their potential employability before lending. Thus, helping derive the borrowers approximate future income and repayment capacity.
Would you say the education loan sector offers scope for more players and better products?
India’s higher education is one of the largest in world with over 35 million students pursuing higher education across 860 universities globally. I certainly believe these numbers will only keep growing as our economy is a knowledge-based economy, wherein human capital with specialized skills is of extreme value. Thus, as the need for qualified professionals rises the opportunity for players who are willing to support deserving students in their quest for quality education will also increase significantly.
What sort of growth are you witnessing? What are the growth projections up ahead?
Avanse started its journey of fulfilling dreams of students in 2013 and has been one of India’s fastest growing education finance company committed to facilitating and fulfilling academic dreams of talented young students. In a short span of time, Avanse has fulfilled dreams of over 13,000 academic aspirants in over 45+ countries including US, UK, Canada, Australia, Germany and others. In its B2B business , Avanse provides funding to Educational Institutes for their growth and working capital needs. Avanse has funded 275 institutes catering to over 5 lakh students.
Avanse’s overall AUM is Rs 3000 crs (including education and other businesses). Avanse is on a high growth trajectory and for the past 5 years since its inception, Avanse has recorded a CAGR of 150%.