To offer instant credit to parents for school fees with equated monthly installment (EMI) payback options
Fintech start-up EarlySalary.com has partnered education-focused non-banking financial company Avanse Financial Services for an instant credit facility that eases the burden of school fees that have started shooting through the roof.
Christened FeES and offered through the EarlySalary mobile application, the digital school fee financing solution is aimed at households seeking quality education for their children but are unable to do so owing to high costs.
According to Akshay Mehrotra, co-founder and chief executive officer, EarlySalary, the FeES solution simplifies the fee payment process through instant credit facility and convenient equated monthly installment (EMI) payback options.
"This partnership will address the problem faced by parents looking to manage their kid's school fees. The plan is to digitally offer instant education loans ranging from Rs 50,000 to Rs 3,00,000 with repayment options of three and six months. We are aiming to reach 100,000 fathers and mothers over the next 18 months. We have already got 100 schools across the country to offer this facility and plan to onboard another 500 over the next 12 months," said Mehrotra, adding that Avanse has been offering loans for higher education in India and abroad and the NBFC is also a lender to schools and has access to a lot of schools in the country.
A growing sector, the existing school education segment in India is valued at $52 billion. Presently, the country has over 1.5 million schools with more than 260 million students. Interestingly, the country's school education sector is evolving owing to increased investments and mushrooming of international schools all over the country. However, the cost of school education is also increasing due to growing demand for an advanced curriculum of international standards and technology-driven teaching methodology.
Amit Gainda, chief executive officer, Avanse Financial Services Ltd, said the FeES solution was conceptualised to tackle challenges around effective management of rising school fees for parents. "It also helps solve the problem of cash flows for schools that need to continuously invest in expanding and upgrading infrastructure," he said.
Elaborating the process of availing this loan facility, Mehrotra said, the company already has a digital payment system to directly make the payment to the schools without any intermediaries.
"We do this in real time. Imagine, the parent has queued up to pay school fees and is keen on paying the annual fees at one go as it is cheaper. All s/he needs to do is feed in the necessary details in the mobile application, take your picture, enter the Aadhaar number and the one-time password generate thereafter and one can transfer the money to the school account even before you reach the counter for your turn to make the payment. In fact, you don't even have to queue up at the school and complete the transaction in the convenience of your home," said Mehrotra.
As per the Associated Chambers of Commerce and Industry of India (Assocham), the annual school fee of a single child has risen from Rs 55,000 in 2005 to Rs 1,25,000 in 2015. A sharp increase in school education costs in metros has made bulk fee payments very difficult for parents. On the other hand, schools find it difficult to offer monthly payment options to parents due to administrative and operational expenses.
NOT OLD-SCHOOL
FeES solution simplifies the fee payment process through instant credit facility and convenient equated monthly installment (EMI) payback options
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