Education loan platform Credenc has raised Rs 17.8 crore ($ 2.5 million) in seed funding round led by Omidyar Network India, with participation of EMCV , Better Capital and IIMK Alumni Fund. The start-up intends to build a loan portfolio of $ 500 million over the next five years.
Delhi-based Credenc, founded by Avinash Kumar and Mayank Batheja in 2017, functions as the digital finance office for more than 200 management colleges in 17 Indian cities. The company has approved loans worth over 100 crore rupees ($ 15 million) so far.
The raised capital will be used to expand operations to 1,000 colleges in 50 cities over the next two years. Credenc also plans to recruit through technological, credit and banking partnerships. With over 200 loan applications per day, the company undertakes a rigorous assessment process using a proprietary AI model that tracks 15 million data points to predict future income for applying students. loan.
According to Credenc, the families of about 30 percent of Indian students sell assets to finance their studies, 20 percent borrow from local lenders at rates of up to three percent per month. Another 30 percent drop out of college. The start-up has mapped 70,000 jobs across 50,000 companies in India and developed an in-depth understanding of employability in India. After providing financial support, Credenc works with students and helps them with employability services, supporting applicants in their transition from student to professional life.
Speaking about the funding round, Mayank Batheja, co-founder of Credenc, said: âCurrently, only 5% of the $ 50 billion spent annually on university tuition is funded by organized lenders. We believe that this penetration should be at least 15%.
Co-founder Avinash Kumar added that Credenc’s target segment consists of the top 10,000 colleges in India, where he would like to cater for the top 10 percent of students.
The annual expenditure on tuition fees in India amounts to $ 50 billion, or roughly 3.5 trillion rupees, of which only five percent is financed by organized lenders. In the United States, that figure rises to over 60 percent.