Mumbai, Jul 19 (PTI) Capital Indian Finance Ltd (CIFL), a non-bank lender, on Monday announced that it will infuse USD 25 million (around Rs 187 crore), including both equity and debt, into education loans-focused fintech Credenc.
The 2017-founded Credenc, which extends loans to students of over 1,000 colleges in 17 cities, aims to build a book of Rs 3,000 crore by 2025 after the funding, as per an official statement.
The statement, however, did not specify the split between debt and equity in the USD 25 million investment as also the current size of Credenc's book.
'The annual spend on college fees in India is around USD 50 billion or Rs 3.5 lakh crore, of which only 5 per cent is financed by organised lenders,' S K Narvar, promoter of CIFL, said.
Narvar said that with Credenc, CIFL intends to change the segment perception and reduce underwriting risk basis Credenc's future employability score, which will help the percentage to go up to at least 15 per cent by 2025.
Credenc has an evaluation process using a proprietary Artificial Intelligence (AI) model, which tracks 15 million data points to predict the future income of students applying for loans, the CIFL statement said. It provides financial assistance based on student potential and future income instead of the existing financial capability of the family which is typically the primary factor considered by traditional education lenders.
'Our partnership with Capital India is very strategic, it will give us both balance sheet and cost of capital advantage which will help in disrupting the education lending segment by providing loans to students who were until now ignored, helping lakhs of Indian students achieve their potential,' Credenc's co-founder Avinash Kumar said.
It offers education loans covering K-12 school fee, online upskilling courses, higher education as well as study abroad courses online, and will soon launch India's first student-focused neo bank, the statement said.
The company is also developing a mobile app that will help students and parents with credit, accommodation, employability, savings, forex, and investments. PTI AA SHW RAM