Securing an education loan for higher studies isn’t an easy task — specially in India. It involves massive paperwork and numerous regulatory approvals before students actually get the money. GyanDhan however — an education financing marketplace, is looking to change the system, and has earned a seed round to do the same.
The seed funding comes from Stanford Angels and Entrepreneurs, along with participation from Harvard Angels, and Pravin Gandhi, Partner- Seedfund Advisors.
The funding will be used by the company to funds to further build its tech platform and to develop its data sciences capabilities. It will also roll out new loan product offerings. Commenting on the same, Ankit Mehra, company’s co-founder, said:
We will use these funds to build the tech platform to provide a better experience for both the banks and the students and to further develop our data sciences capabilities .We will be rolling out new loan product offerings catering to the underserved pockets in domestic education over the next 12 months.
However, this isn’t the first funding round raised by GyanDhan. Earlier, it had raised angel funding from Satyen Kothari, founder of Cube and Citrus Pay. The money was used to fund operations from the concept phase to the first loan disbursal.
The startup, which started operations in May this year, provides students an option to apply for loans up to Rs 30 lakhs without any collateral for higher education abroad. It was founded by Ankit Mehra and Jainesh Sinha, both of whom spent 5+ years working for Capital One.
GyanDhan seeks to expand and equalize access to higher education through its proprietary models that can help banks assess employability of students and help them make better decisions. It has partnered with several financial institutions to provide education loans for higher studies.
It claims to have processed over 2500 applications to date, and has already helped students avail loans worth Rs. 10 crore through these financing institutions. To ensure quick resolution of the applications, the company’s team is working closely with the students as well as the bank. The company’s founder said:
We realized that lack of transparency in the entire process often resulted in a lot of angst amongst the students, and decided to partner with a few banks to maintain high levels of customer service.
Paula Mariwala, Co-President of SA&E, said:
Lack of availability of funding from the Indian financial institutions is one of the key hindrances faced by students pursuing higher studies. Most times, either the banks ask for very high ratio of collaterals or the loan processing takes a long time. GyanDhan’s merit-based lending that accounts for the potential of the student, and an approach that engages the student rather than viewing them as a pure transaction will provide the much needed alternative for education loan.
As per the company, Indian students spend $14 billion abroad annually with bank financing contributing less than 5% to it. GyanDhyan believes that the reason behind this is that Banks have been reluctant to participate in education loans market due to high NPA levels.