Finance conglomerate Capital India has invested $25m via equity and debt in education loans platform Credenc.
Delhi-based Credenc, which extends loans to students of over 1,000 colleges in 17 cities, will use the funds to build a loan book of Rs 3,000 crore by 2025 and enable more education loans.
According to Capital India promoter SK Narvar, “The annual spend on college fees in India is around $50bn or ₹3.5+ lakh crore, of which only 5% is financed by organised lenders. With Credenc, Capital India intends to change the segment perception and reduce underwriting risk basis Credenc’s future employability score, which will help this percentage go up to at least 15% aiming to lend 3000 crores by 2025.”
Credenc founders Avinash Kumar and Mayank Batheja will continue to run the operations.
Founded in 2017, Credenc offers education loans covering K-12 school fees, online upskilling courses, education abroad, as well as higher education. By using a proprietary AI model, Credenc tracks 15 million data points to predict students’ future income applying for loans. It provides financial assistance based on student potential and future income instead of the family’s existing financial capability, which is typically the primary factor considered by traditional education lenders.
The startup is looking to launch a student-focused neobank soon. Currently, it is working on developing the entire student education ecosystem helping students and parents with, credit, accommodation, employability, savings, forex and investments on a mobile app.
Kumar said, “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.”
Capital India Finance Ltd is an SME finance and affordable housing finance company that helps SMEs and MSMEs access capital via loans. It also offers micro ATM and domestic remittance services, among others, via its fintech unit called RapiPay.
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