Prodigy Finance, a UK-based fintech company providing loans to students globally without any collateral or cosigner, says it witnessed a 98% growth in study-abroad loan applications from India in the first three months of 2022, compared to 2021 figures.
There has been a surge in the number of students going abroad in general. V Muraleedharan, minister of state for external affairs, told Rajya Sabha that over 1.33 lakh students had left the country for education in foreign universities till March 2022. The Open Doors report stated that the number of Indian students in the US rose 18% in 2021-22; in 2022, the US Mission in India issued a record 82,000 student visas till September. Also for the first time, there are more Indian students than Chinese in the United Kingdom, with their number growing 273% from 2019 to 2022. Overall, the number of students going abroad is roughly increasing by 8-10% year-on-year, with the Indian student loan market currently at $10 billion or more, according to Unitus Ventures. With only 5% of this market being serviced by the organised sector, the opportunity is huge, said Mayank Sharma, head of global partnerships and country head, India, Prodigy Finance. Tapping into it are private financial companies global firms like Prodigy Financing and MPower, and Indian companies such Avanse Financial and Gyan Dhan. They offer a host of collateral-free loans through risk and data analysis.
However, despite the sharp spike in numbers, there's fear of trouble ahead. Inflation, recent layoffs in the technology sector, war have made both students and lenders cautious.
Independent loans, interest rates
The Indian student loan market still works on collateral for most loans.
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