Lack of availability of funding from the Indian financial institutions is one of the key hindrances faced by students pursuing higher studies
GyanDhan Co-founders
India is a country where car loans are available in the easiest terms in just a few hours, while education loans can take months of paperwork and they come attached with higher interest rates. No wonder education is one of the biggest and highly profitable businesses in India.
A startup called GyanDhan aims to bring a change to this trend.
GyanDhan, an education financing marketplace, has just raised an undisclosed amount in seed funding from Stanford Angels and Entrepreneurs (SA&E), with participation from Harvard Angels. A few other individual investors, including Pravin Gandhi (Partner at Seedfund Advisors), have also invested.
“We will use these funds to build the tech platform to provide a better experience for both the banks and the students and to further develop our data sciences capabilities. We will be rolling out new loan product offerings catering to the underserved pockets in domestic education over the next 12 months,” said Ankit Mehra, Co- founder of GyanDhan.
GyanDhan had earlier received angel funding from Satyen Kothari, Founder of Cube and Citrus Pay, to fund operations from the concept phase to their first loan disbursal.
GyanDhan was founded by two IIT alumni Ankit Mehra and Jainesh Sinha and started operations in May this year. It has partnered with financial institutions to provide education loans for higher studies.
The startup provides students an option to apply for loans up to INR 30 lakh (US$45,000) without any collateral for higher education abroad.
GyanDhan claims to have processed over 2,500 applications to date, and already helped students avail loans worth INR 10 crore (US$1.5 million) through these financing institutions. ‘We expect that the remaining applications will be processed soon and expect to sanction over INR 30 core (US$4.5 million) in loans by the end of this year,” said Sinha.
Indian students spend US$14 billion abroad annually with bank financing contributing less than 5 per cent to it.
“Banks have been reluctant to participate in education loans market due to high NPA levels. As a result, higher education remains a privilege of the rich and contributes to an ever increasing disparity rather than being the great leveller it was supposed to be. We seek to expand and equalise access to higher education through our proprietary models that helps bank assess employability of students and help them make better decisions,” added Sinha.
“Lack of availability of funding from the Indian financial institutions is one of the key hindrances faced by students pursuing higher studies. Most times, either the banks ask for very high ratio of collaterals or the loan processing takes a long time. GyanDhan’s merit-based lending that accounts for the potential of the student, and an approach that engages the student rather than viewing them as a pure transaction will provide the much needed alternative for education loan,” said Paula Mariwala, Co-president of SA&E.
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