Avanse expects 50% growth in education loan disbursements from Northern India

New Delhi: Avanse Financial Services (Avanse), a new age education finance company, targets 50% growth in disbursements from Delhi region and overall 45% growth in India for the current financial year. As of March 31, 2018, Avanse’s AUM stood at about INR 2200 crores. For the past 5 years since its inception, Avanse has recorded a CAGR of 157%. So far Avanse has funded over 13,000 students across India and has tie ups with over 550 institutes and consultants in India and globally.

Commenting on Avanse’s growth journey in Delhi, Amit Gainda, CEO, Avanse Financial Services said, “Since Avanse’s launch in Delhi in 2013, it has been a very exciting journey for us. Delhi has been an important market for Avanse owing to the increased demand for higher education and uptrend of new age courses. In the past year, Avanse recorded 70% growth from Delhi region. Higher education courses such MS and MBA are popular among Delhi students. US, Canada and New Zealand are the top preferred study destinations for students in Delhi. We are also witnessing a steady shift towards new age courses in vocational and skill development such as photography, , Image consulting, Music etc. We are pioneering the trend of financing these courses. The Delhi market contributes about 20% of Avanse’s total education loan disbursements in India.”

Further commenting on Avanse’s plans to boost education financing in Delhi, Mr. Amit Gainda added, “Delhi is emerging as one of the primary contributors to the Avanse business nationally, and is one of the most significant and evolving markets in the Indian education sector. In this purview, we are targeting a 50% growth in the Delhi market in the current year. To enable this, we plan to amplify our local network, reach and offerings.

As a knowledge-based economy that requires human capital with specialized skills, India’s ever-growing higher education market is further poised to become the largest in the world, thus, in turn boosting the education finance sector. India is expected to have the world’s largest tertiary-age population and second largest graduate talent pipeline globally by the end of 2020. Capitalising on this opportunity, Avanse has successfully transitioned from ‘collateral driven’ education loan to ‘student led approach’, whereby Student academics, future employability potential and pedigree of the course & institute is taken into consideration for granting loan.

Elaborating on the higher education scenario in India and Avanse’s growth plans, Amit Gainda said, “In this favorable scenario, we are expecting a growth of 45% across India in the current year. To meet this growth, we are enhancing our operational, digital and technological capabilities and processes with an aim to improve customer experience and enhance productivity through technology. Some of the key initiatives include straight through Loan processing with automated score cards, artificial Intelligence allowing loans to ‘New to Credit’ customers allowing financial access and digitization of systems and processes. Basis its deep domain expertise and robust credit underwriting skills , Avanse is pioneering the trend of financing new age and specialized courses such as vocational and skill development courses These courses have lately become very popular among students over the above the conventional medicine, IT, engineering and management courses.”

Avanse has been at the forefront of creating great value for customers by offering features including 100% funding including course fee to living expense during the study period, instant and one day loan sanctions for select programs and universities and limitless education loan with responsible borrowing and lending practices. Avanse provides customized product offerings to students with flexible repayment structure thereby minimizing their burden during the course duration.

Education Infrastructure Lending

With its strong understanding of the education sector, Avanse forayed into Education Infrastructure lending (EIL) in 2014. Under its EIL business, the company provides financial assistance to educational institutions such as universities, colleges, schools, pre-school, coaching classes amongst others for their growth and working capital requirements. Lending under this category could be for adding infrastructure such as buildings, libraries, laboratories, amongst others. The Education Infrastructure Lending product enables Educational Institutes fulfil their capital and operational expenditure. This division was launched with an aim to support the educational infrastructure for ensuring that quality education is imparted to Indian students, thus enabling education to become affordable and accessible.

Avanse Financial Services closed India’s first securitisation of education loans

In March 2018, Avanse Financial Services, and Chennai headquartered fintech marketplace, Vivriti Capital, closed the first-of-its-kind securitisation of education loans in India aggregating to INR 108 Crore. This unique endeavour is the first instance of securitisation of education loans in India. While speaking about the first education loan securitization deal, Amit Gainda, CEO of Avanse Financial Services said, “Avanse has been at the forefront of key developments in the education funding business. This first-of-its-kind securitisation arrangement highlights the quality of our loan book portfolio, which continues to demonstrate a steady growth momentum. The deal is in line with our growth strategy and will enable Avanse to access capital for the growth we are seeing in our business. For the education sector, such deals could go a long way in aiding the growth of the industry.”

Education Sector Overview (IBEF Report)

In India, financing in education sector provides a huge opportunity, there are over 260 million students enrolled in K12 schools. This creates a huge pipeline of students who would pursue higher education in year to come. There are over 1.5 million schools in India, while government schools dominate the market, penetration of private schools is increasing. Preference for private schools is increasing among the parents, on account of increasing urbanization, rise in disposable income and desire to provide quality education for their children. India’s higher education is one of the largest in world with over 35 million students pursuing higher education across 40,000 institutes in over 860 universities. In addition there are over 5.8 lakhs Indian student studying abroad. With well-planned expansion and a student-centric learning-driven model of education, India has not only bettered its enrolment numbers but has also dramatically enhanced its learning outcomes. Moreover, the massification of primary and secondary education has led to a significant jump in number of students aspiring for higher education. As a result, India’s higher education system remains one of the largest in the world. Overall, presence of this huge education ecosystem with rising education spends both in infrastructure and on tuition fees, provides huge growth potential for Education loans (both in B2C and B2B segment) in India. Avanse with its deep domain expertise in education financing is well poised to grab this opportunity.