Education loan book of NBFCs to cross Rs 60,000 cr but growth slowing

Lenders have reduced exposure to those studying in Canada to 15 per cent in FY24

The education loan book of non-banking financial companies (NBFCs) is seen growing at 40-45 per cent to cross Rs 60,000 crore in FY25. The growth is slower than annual run rates of more than 80 per cent and 70 per cent in FY23 and FY24, according to a report by CRISIL Ratings.

The portfolio performance of NBFCs has been resilient, based on strong credit underwriting. The 90-day plus past due for education loans was 0.2 per cent in FY24, whereas for private and state-run banks it was 2 per cent and 3.9 per cent.

While the United States, the United Kingdom and Canada are preferred destinations for Indian students, NBFCs have reduced exposure to those studying in Canada to 15 per cent in FY24, from 21 per cent two years ago. This has been in response to changes in the regulatory and operating environment there.

The number of Indian students studying abroad is estimated to have doubled in the past five years to around 1.34 million.