Capital Indian Finance (CIFL), a non-bank lender, made a USD 25 million (about Rs 187 crore) investment in the education loans-focused fintech Credence.
According to an official release, Credenc, which was formed in 2017 and provided loans to students at over 1,000 universities in 17 locations, wants to create a book worth Rs 3,000 crore by 2025 following the financing. The announcement, however, did not clarify how the USD 25 million investment was split between debt and equity, nor did it identify the current size of Credenc’s book.
According to the CIFL statement, Credence has an evaluation process that uses a proprietary artificial intelligence (AI) model that tracks 15 million data points to predict students’ future income applying for loans. It provides financial assistance based on student potential and future income rather than the family’s existing financial capability, which is typically the primary factor.
“Our partnership with Capital India is very strategic; it will give us both a balance sheet and a cost of capital advantage, which will help us disrupt the education lending segment by providing loans to students who were previously ignored, enabling lakhs of Indian students to achieve their full potential,” Credenc co-founder Avinash Kumar said. The statement offers education loans for K-12 school fees, online upskilling courses, higher education, and online study abroad courses.
It will shortly establish India’s first student-focused neo bank. In addition, the firm is working on a mobile app that will assist students and parents with credit, housing, employment, savings, currency, and investments. The firm is a quasi financing firm that offers real estate project finance, loan against shares, lease rental discounting, commercial property acquisition loans, unsecured loans, personal loans, and structured finance.
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