Credenc, a fintech platform, which provides education loans, has secured INR 17.8 crore in a seed-round of funding from Omidyar Network India, EMVC, Better Capital, and IIMK Alumni Fund, reported ET.
The infused funding will be used by Credenc to increase support for 1,000 colleges across 50 cities by 2021.
The platform Credenc also looks to hire across technology, credit and banking partnerships.
It plans to build up a loan book of $500,000 over the next 5 years.
Mayank Batheja, co-founder, Credenc, said that currently only 5 per cent of the $50 billion annual spends on college tuition fees is financed by organized lenders.
“We believe this penetration should be at least 15%,” Batheja added.
Credenc is based out of Delhi, which was founded in 2017 by Avinash Kumar and Mayank Batheja. The lending space gives finance to more than 200 management colleges across 17 cities in India.
The platform claims that it gets over 200 loan requests a day.
Approval for education loans can take up to 2 months, for most loans via banks and other financial offerings, but claims to complete credit check of applicants within a fraction of that time.
Furthermore, as per the Credenc data, around 30 per cent of Indian students’ families sell assets to fund their education.
While, about 20 per cent borrow from local money lenders at rates as high as 3 per cent a month, the report added. And, another 30 per cent give up on a college education, the report announced.
The startup claims to has mapped 70,000 job roles across 50,000 companies in India to develop an understanding of employability in India.
“Credenc’ differentiated lending model provides financing to deserving students, which helps them access post-secondary education and get meaningful employment. Avinash and Mayank’s solution will help in creating a level playing field for students from the Next Half Billion population by making quality education more accessible. We see this partnership as an opportunity to demonstrate that a highly impactful and profitable business can be built in the large and untapped higher education financing space,” said Sarvesh Kanodia, associate, Omidyar Network India.
Some of the leading financial tech startups, which provides loans include Groww, Aye Finance, Lendingkart, Paytm Payments Bank, among others.