Overseas students are yet to return to the UK, the US or Australia, but Warburg Pincus-backed Avanse Financial Services said that mobility curbs have not dented lending opportunities as top global universities have switched to online classrooms. This has helped Avanse grow its asset under management by a modest 4% year-on-year to Rs 3103 crore at the end of FY21 and earn a 73% higher net profit at Rs 38 crore, despite the disruptions created by the pandemic, chief executive Amit Gainda said.
Around half of Avanse’s AUM was on account of financing overseas studies. “Contrary to perception, the education loan market offers growth opportunities as overseas universities adapt well to the online modules for the time being, while students will travel abroad when normalcy returns,” Gainda told ET in an interview. Central bank data showed the market contracted 3.5% in FY21 to Rs 1.12 lakh crore.
Avanse aims to achieve a 12-15% loan growth in the next 12 to 18 months even as it dec ..
No capital infusion is needed for FY22, Gainda said, explaining that with 2.5 times leverage of the present capital, the company can go up to 5 times without fresh capital. Established in 2013, Avanse is strengthening its solutions for students as well as Indian educational institutions. Its outstanding education loans was at Rs 1793 crore while that of education institutional loans was Rs 970 crore. The balance was on account of school fee financing and others. About 5% of its AUM was on account.
account of school fee financing and others. About 5% of its AUM was on account of residual MSME loans, a business vertical it exited in September 2019.
was 0.44% when it comes to educational loans, the company said. “The company has always focused on prudent management of cash flows and thus, has maintained a strong ALM (asset-liability mismatches) with positive mismatches across all time buckets,” it added.