Match-making between knowledge and money

This is the story of 32-year-old Ankit Mehra, who wanted to start a sports venture, but ended up founding a company that helps students going abroad for higher studies get loans.

A graduate in mechanical engineering from IIT Kanpur, Ankit joined American bank Capital One, where he worked for six years – three each in India and in the US. His idea was to come back to India and start something in the sports sector. He believed the sporting culture and environment in Europe were much better than in the US. He joined IESE, a B-School in Spain, because he had interacted with some of the professors there, who also happened to have contacts with the top football clubs in the country.

At IESE, an entire set of events happened that changed his plans. He was one of the lucky few who had managed to get a bank loan for studies. Many others, who had commitments from banks for loans, were left high and dry because the banks went back on their agreements. “That is when it really struck me the first time,” he says, of the idea behind GyanDhan, an education focussed financing platform.

In his second year at IESE, he worked for a brief while with a start-up in Latin America in the education sector, which had an office in Spain. In January 2015, he decided he would return to India and start working on his own venture. He got in touch with Jainesh Sinha, an IIT Delhi alumnus, who was his colleague in Capital One. They incorporated GyanDhan in August 2015 and launched operations in April 2016. The initial months were spent figuring out the business model and trying to convince banks on how they should look at the higher studies market for business.

They also realised they needed to provide something more to the banks if they were to convince them to sanction the loans. “That is where we spent a lot of time developing the GyanDhan score, the employability metrics,” says Ankit. It has gathered data of students going abroad for higher studies over the last 15 years and used that as one of the inputs to build this model.

They signed their first agreement with Axis Bank in April 2016, after which they tied up with SBI and Bank of Baroda. They signed up with Sundaram Finance, which picked up an equity stake earlier this year in GyanDhan.

According to Ankit, the problem for banks was they did not know how to differentiate between one student and another, while considering an application. Thanks to their experience in Capital One, Ankit says they were able to come up with a model that will help predict the odds of someone getting a job. After all, banks are interested in knowing whether their loans will be repaid and the employability metric was meant to help them do that.

How do they work out the risk profile of a student? Ankit, CEO and co-founder, GyanDhan, says the basic eligibility section is the first step. It then gets more details from the students – the school they studied, where they plan to study abroad, the course they are applying for, work experience, grades – and feeds that information into a proprietary system that gives a score on the probability of that student getting a job or not, or the kind of salary the student can expect. “That will flow as one of the inputs to the banks,” he says.

Ankit says GyanDhan now is just a match-making platform, but is increasingly taking up more work for the banks. One of the large lenders has asked the company to pick up documents on its behalf. A call centre in the company regularly monitors the process to find out whether it has been broken in any place because, says Ankit, the biggest issue was around fulfilment.

“We have been able to reduce the timeline significantly.” GyanDhan has crunched the time to a couple of weeks from a few months earlier. GyanDhan has so far facilitated nearly 500 loans, with a total value of ₹144 crore, the average size of a loan being ₹27 lakh. It doesn’t charge the students, but earns its income from the banks as a percentage of the loan amount disbursed.

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