NEW DELHI: Capital India, a company that provides finance to SMEs and individuals, will invest $ 25 million in education loan start-up Credenc.
Credenc is a Delhi-based, technology-based education lending platform established in 2017 and currently working with around 1,000 colleges in 17 cities. The new capital injected through debt and equity will help Credenc expand its loan portfolio in a booming industry in India, and more after technology adoption has broadened reach over the past 18 months.
SK Narvar, promoter of Capital India, said that the annual expenditure on tuition fees in India is around Rs3.5 lakh crore, of which only 5% is funded by organized lenders. Narvar said the founders would continue to manage Credenc’s operations “because we wouldn’t want to disrupt the functioning of the organization and believe they know the business best.”
“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 lending segment by providing loans to students who were so far ignored, helping thousands of Indian students to realize their potential. “said Avinash Kumar, co-founder of Credenc.
The start-up undertakes a rigorous assessment process using a proprietary artificial intelligence (AI) model, “which tracks 15 million data points to predict future income for students applying for loans.” the existing financial capacity of the family, which is usually the main factor taken into account by traditional education lenders.
Credenc offers student loans covering K-12 tuition, online refresher courses, graduate studies as well as overseas courses and is looking to lend Rs 3,000 crore from here 2025.
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