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MUMBAI : Non-banking financial companies (NBFC) are arranging forex and credit cards, laptops, electric vehicles, mobile phones and overseas accommodation for student borrowers, aiming to become one-stop financial shops. The companies are tying up with phone and automakers to attract more students, at a time many are upgrading skills through courses or heading abroad for higher studies.

After two years of pandemic-disrupted campuses and -flights, 2022 is seeing a resurgence in students heading abroad. Most new sessions start at the beginning of August or September and students are heading out now.

“We are looking at other financial products that our student borrowers might need. We started offering top-up loans, where students who have taken loans can opt for another tranche," said Ankit Mehra, co-founder and chief executive officer at GyanDhan, an NBFC.

Last year, just two students asked for top-ups from GyanDhan, whereas last month alone, 115 students took out top-up loans of 2-10 lakh. “This is the impact of depreciating rupee value and high inflation in the US. We are also working with companies to offer credit card and forex card offerings," Mehra said.

After a pandemic-fuelled boom, online learning has cooled as classrooms reopened, tempering loan demand and investor interest in the segment. Some NBFCs are avoiding the segment due to a higher risk perception; hence, widening options can help NBFCs improve disbursement rates.

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“We aspire to become the lender of choice for India’s learners. By offering learner-centric services such as student cards, learners’ insurance, assessment-based programme recommendations, we are building India’s biggest learner ecosystem," said Varun Chopra, co-founder and chief executive of fintech NBFC Eduvanz. It also plans to offer affordable loans for students to choose from electric bikes, MacBooks, phones and smart wearables. The typical loan in this segment is 1.5-2 lakh. The ancillary services also help device and auto makers reach more customers. In most cases, manufacturers offer a discount to customers of these NBFCs.

NBFCs catering to smaller tranches of loans for office-goers or graduate students who want to upgrade their skills before a job, are offering electric vehicles, laptops and mobile phones as well.

Mayank Sharma, head of global partnerships and country head for Prodigy Finance, said his company is also considering the ancillary services to offer. “In the near future, we will dabble into it and discussions are on. Students don’t need to go to multiple platforms," he said.

Prodigy Finance said student loan applications in the first seven months of 2022 rose 89% from 2021, and 86% in 2021, compared with 2020. The company said that compared with the first seven months of 2020, pre-covid, there was a 27% increase in student loan applications compared with the same period a year ago.

Typically, the loans are given at flat rates and students repay after a stipulated period of time to the NBFC. The fintechs get to keep a certain percentage of the repayments, when paying back to their alliance partners, which could be K-12 schools or original equipment manufacturers (OEMs). The percentages vary. According to the Reserve Bank of India, outstanding education loans from banks stood at 84,375 crore as of 17 June 2022.

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