Turning Students' Dream Into Reality

Amit Gainda, CEO Avanse Financial Services speaks to BW Education

File Photo of Amit Gainda, CEO Avanse Financial Services

Q. What are the types of loans that you offer for the Education Sector?

Established in 2013, Avanse is one of India’s fastest growing education finance company committed to facilitating and fulfilling academic dreams of talented young students. In the education domain Avanse provides loans across two segments:

Education Loan (B2C) – Loans for financing higher education needs of students. With our new age, flexible and tailored financial solutions, Avanse addresses higher education needs of the Indian youth by making higher education affordable. In a short span of time, Avanse has fulfilled dreams of over 13,000 academic aspirants in over 45+ countries including US, UK, Canada, Australia, Germany, and others.

In addition, Avanse partnered with a digital-lending Fintech firm to introduce a first-of-its-kind digital, school fee financing app that helps parents to digitally secure education finance for their children’s school fees through instant credit facility and convenient EMIs. 

Educational Institutional Loan (B2B) – Loans for financing working and growth capital needs of educational institutes (primarily catering to K12 i.e Schools). So far Avanse has funded over 7 lakh beneficiaries.

Q. How is Avanse different from other players including public sector banks?

At Avanse we take every effort to ensure that a deserving student gets the funding he/she needs. We believe that socio-economic background is not the only criteria for student success and the same has been proven by research as well.

Our student-led approach also ensures that deserving students get the financial support they need irrespective of their economic status by focusing on the factors like academics background, eligibility criteria, a pedigree of the course and institute and future employability opportunities. 

Many of the banks and other financial institutions, provides loan only for the tuition fees. However, Avanse provides finance covering complete cost of education including living and other expenses, exam and library fees, books and equipment (computer) and/or traveling expenses without putting a cap on the amount that can be borrowed.  

Q. What are your criteria for sanctioning education loans? Are you loans restricted to students planning to study overseas?

Avanse takes a holistic student-centric approach to support a student’s desire for higher education. We look at student’s past academics, the program that the student wishes to pursue, the institute where he/she has been admitted and its placement record and the future employability potential of the student. 

Avanse provides loan for education across all levels in India and abroad – school education, undergraduate course, postgraduate course and executive education. Additionally, Avanse also provides loans to educational institutes in India to fund their growth and working capital needs. Avanse in partnership with Early Salary also helps parent’s fund their child’s school fees digitally. 

Q. How are you exploring digital solutions for a better experience of the consumer?

Avanse being a new age education finance company is committed to providing customer-centric services and advanced digital solutions to meet the education financing needs of the millennials. Avanse strongly believes in investing in innovative digital solutions with an aim to improve customer experience and enhance productivity through technology. Some of the key initiatives include Straight through Loan processing with automated scorecards and employability predictability model in partnership with a leading fintech company in education space. Recently, Avanse partnered with a digital-lending Fintech firm to introduce a first-of-its-kind digital, school fee financing app that helps parents to digitally secure education finance for their children’s school fees through instant credit facility and convenient EMIs. 

Q. What are the top courses for which students are applying for education loans these days and on an average loan, they are applying?

The highest requirement for financial assistance is felt mostly at the post-graduation stage followed by undergraduate programs that are picking up lately. The top courses for which students seek financial assistance include Engineering, Science and Technology, Mathematics, Medical, Masters of Science, MBA, Architecture and law. There is also a steady shift towards new age courses in vocational and skill development such as Photography, Image consulting, Music etc. Avanse has been pioneering the trend of financing these unconventional courses. 

The education loan amount applied by students depends totally on the amount required for completion of the course. NBFCs like Avanse provide Education loans that not only cover the fees but also other living expenses incurred by the student during the study tenure. 

Q. There is always a tussle between keeping fees low and keeping the quality of education high. Avanse, being an education-focused NBFC has ventured into School fee financing. Can you share how this can help the school leadership?

Running a school has its own financial challenges of maintaining a balance between the ever the increasing costs and overheads without compromising the quality of education. The focus of schools these days is on all-round development of the students which needs investment on resources and running costs. Being an education-focused financer, Avanse offers a win-win solution to school management and parents. 

Today parent pays for their child fees either quarterly or half yearly. However, schools have their ongoing working capital expenses which need to be funded on regular basis. Similarly, most schools these days have very high fee structure & parents find it extremely difficult to pay these fees in one installment. Therefore, through our School Fee Financing option, we allow a parent to pay the schools' fee charges in one go and pay us back with the convenience of monthly EMIs. School gets upfront credit of school fees instead of quarterly or half-yearly,   that helps schools manage their working capital.

Q. How does a company like Avanse step in and help the education leadership? 

Raising funds is a challenge for many schools for a number of reasons. As an Education Focused NBFC, Avanse can address these challenges through the right mix of our in-depth understanding of the education business and the right professionals on board to work with school leadership. Avanse provides tailor-made solutions to education institutions for growth capital CAPEX to Education Institutes across the country, including Tier 2 and 3 cities. These solutions cover an entire spectrum - for increasing capacity, for additional facilities, for sports infra or other working capital needs.  

Q. What according you are the key challenges faced by institutions while raising funds?

There exist few financial organizations in the market that possess a deep understanding of education space especially on the B2B space as most institutions are run by trusts or societies which are for not for profit. In addition, there exists over-reliance on one key person/founder for all needs including financing in such establishments. Some of the smaller institutions need guidance from professionals in managing books and in planning finances. Banks have their own limitations in terms of focus and reach to cater to financing needs of educational institutes especially in Tier 2 and Tier 3 cities. Also, managing school finances is a challenge given the irregularity in the cash flows (fees are accrued quarterly and half yearly). Education focused NBFC such as Avanse with its deep domain expertise and understanding of the nuances of the sector, provides a tailor-made solution to such educational institutes with a faster turnaround time.

This article was published in BW Education issue dated 'Nov. 20, 2018' with cover story titled 'BW Education Issue Nov-Dec 2018'

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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