Mumbai, Feb. 7: DHFL, the country’s second-largest housing finance company in the private sector, today ventured into education finance with the launch of Avanse Education Loan.
It has set up a non-banking finance company (NBFC) that will provide education loans for higher studies.
The NBFC, a non-deposit company, will compete largely with PSU banks that now dominate the education loan market. It is estimated that the education sector finance rose to Rs 50,000 crore in 2011-12 with cumulative loan accounts standing at 2.5 million.
Kapil Wadhawan, chairman and managing director of Dewan Housing Finance, told reporters here today that education loans provided a large business opportunity since India had an estimated 150 million people falling in the age group of 18 to 23 years. This made higher education attractive for private and foreign players.
The market for student loans, he added, had been growing every year at a compounded annual growth rate of around 30 per cent. This trend is expected to continue, driven by the projected growth on education spends.
The Avanse loans will cover the complete cost of education, including living and other expenses. The minimum value of the loans is Rs 50,000. It will provide flexible repayment plans.