Capital India has added another business to its portfolio by investing $25 million in mixed equity and debt in Credenc, an education lending fin-tech platform. The aim is to ensure Capital India's vision to enable digital financial products and services to Indian customers.

“The annual spend on college fees in India is around $50 billion or ₹3.5+ lakh crore, of which only 5 per cent is financed by organised lenders. With Credenc, Capital India Finance Limited (CIFL) intends to change the segment perception and reduce underwriting risk basis Credenc’s future employability score, which will help this percentage go up to at least 15 per cent aiming to lend 3000 crores by 2025. Also, the founders will continue to run operations for Credenc as we would not want to disrupt the working of the organisation and believe they know the business best,” said SK Narvar, Promoter, Capital India

Evaluation process

The Credenc undertakes a rigorous evaluation process using a proprietary artificial intelligence (AI) model, which tracks 15 million data points to predict students’ future income applying for loans. They provide financial assistance based on student potential and future income instead of the family’s existing financial capability, which is typically the primary factor considered by traditional education lenders.

“Our partnership with Capital India is very strategic, it will give us both balance sheet and cost of capital advantage which will help in disrupting the education lending segment by providing loans to students who were until now ignored, helping lakhs of Indian students achieve their potential,” said Avinash Kumar, Co-founder, Credenc.

Credenc offers education loans covering K-12 school fees, online upskilling courses, higher education as well as study abroad courses at the click of a button and will soon launch India's first student-focused neo bank. It is currently developing the entire student education ecosystem helping students and parents with, Credit, Accommodation, Employability, Savings, Forex, and Investments on a mobile app.

“We are keeping the students at the core of our business and building a digital ecosystem that will serve them like never before. We are making finance and banking simple for Indian students and enabling them to be financially literate and responsible,” said Mayank Batheja, Co-founder, Credenc.

With this investment, Credenc is looking to build a book of ₹3,000 crore by 2025. It is a Delhi-based fintech founded by Avinash Kumar and Mayank Batheja in 2017 and is a technology-led education loans platform, working as the digital finance desk of 1,000+ colleges across 17 cities in India.