Education loans to remain among fastest-growing segments for NBFCs: Crisil
Their assets under management (AUM) is expected to grow at a healthy clip of 40-45 per cent to cross Rs 60,000 crore this fiscal, as per the rating agency.
By definition, the assets under management (AUM) is the market value of the investments managed by the entities.
After robust growth of over 80 per cent and 70 per cent in fiscals 2023 and 2024, respectively, NBFCs' education loan assets under management (AUM) rose to Rs 43,000 crore as on March 31, 2024.
On the asset quality front, metrics should remain stable despite country-specific concerns, a CRISIL Ratings analysis indicates, the report added.
«The number of Indian students studying abroad is estimated to have doubled in the past five years to around 13.4 lakh as of last fiscal. Only a tenth are being funded by these NBFCs, and even including education loans by banks, the financed quantum is not much higher. What that indicates is that a large portion of overseas education is being funded through alternative means — informal financing, self-funding, or perhaps other forms of loans,» said Ajit Velonie, Senior Director, CRISIL Ratings.
«That shows education loan companies have significant headroom for growth. Rising ticket sizes because of ascending tuition fees, inflation and living expenses are also tailwinds. Strong micro-market intelligence and fast turnaround times have allowed NBFCs to carve out a niche in the education loans space. Their specialised business model--backed by strong understanding of relevant geographies, courses, universities,
