Capital Indian Finance (CIFL), a non-bank lender, on Monday announced an investment of $ 25 million (around Rs 187 crore) comprising both equity and debt in fintech Credenc, which focuses on loans to the education. Credenc, founded in 2017, which provides loans to students at more than 1,000 colleges in 17 cities, aims to build a pound of Rs 3,000 crore by 2025 after funding, according to an official statement.
The statement, however, did not specify the breakdown between debt and equity in the $ 25 million investment or the current size of Credenc’s book. The annual expenditure on tuition fees in India is around US $ 50 billion or Rs 3.5 million lakh, of which only 5% is funded by organized lenders, said SK Narvar, promoter of CIFL.
Narvar said that with Credenc, CIFL intends to change the perception of the segment and reduce Credenc’s future employability score based on underwriting risk, which will help the percentage to reach at least 15% by 2025.
Credenc has an assessment process using a proprietary artificial intelligence (AI) model, which tracks 15 million data points to predict future income of students applying for loans, the CIFL statement said, adding that it provides a financial aid based on student potential and future income instead. the existing financial capacity of the family which is usually the main factor taken into account by traditional education lenders.
Our partnership with Capital India is very strategic, it will give us both a balance sheet and cost of capital advantage, which will help disrupt the education loan segment by providing student loans that were until now ignored, helping thousands of Indian students to realize their potential, Credenc co-founder Avinash Kumar said.
It offers student loans covering K-12 tuition, online refresher courses, graduate studies as well as online courses abroad, and will soon launch India’s first neo-bank. student-oriented, according to the release.
The company is also developing a mobile app that will help students and parents with credit, housing, employability, savings, foreign exchange and investing.
