Avanse eyes Rs 20 cr edu loans from Gujarat

In last eight months already, company has serviced over 25 students in Gujarat with loan disbursements of around Rs 1.23 cr

With the education finance sector growing at a CAGR of 30 per cent since last five years, Avanse Education Loans (Avanse) is targeting edu loan disbursements of Rs 20 crore to around 200 students in Gujarat for fiscal 2014-15.

In last eight months already, the company has serviced over 25 students in Gujarat with loan disbursements of around Rs 1.23 crore.  

Talking about higher education finance trends, Neeraj Saxena, CEO, Avanse Education Loans said that increasingly parents who are capable of funding their children are wanting the latter to fund their own higher education.  “The trend these days is parents wanting their children to apply and pay for loans on their own,” he added.

A non-banking finance company (NBFC) regulated by RBI, Avanse Education Loans is an associate company of Dewan Housing Finance Corporation Limited (DHFL). The International Finance Corporation (IFC), an arm of the World Bank holds 20 per cent equity stake in Avanse.

In Gujarat, the company has tied up with institutes such as Adani Institute of Infrastructure Management (AIIM), MICA and Unitedworld School of Business (UWB), among others.

According to Saxena, annual expenditure on higher education is Rs 80,000 crore by Indian students while education finance penetration is still low at 16-17 per cent.

In terms of education streams, engineering, management and medicine represent 80 per cent of the total streams sought after by students. Average ticket size for Avanse has been Rs 8 lakh in terms of disbursements and Rs 20 lakh in terms of sanctions in the ratio of 60:40 for overseas and domestic higher education, respectively.

In last one year, nationally, the company has serviced over 700 students in last one year and disbursed loans worth Rs 63.53 crore. Avanse, wherein DHFL has 48.5 per cent stake, Wadhawan Group has 31.5 per cent stake and IFC has 20 per cent stake, offers education loans at interest rates between 12.25 per cent and 13.05 per cent for a tenure of 7-10 years.