Non-banking finance company, Dewan Housing Finance Ltd (DHFL) has entered into the education loan segment with ‘Avanse' where it targets to have a education loan portfolio of Rs 200 crore in the first year of operations.
The loans will be provided at an interest rate over and above the base rate which is at 11.50 per cent. Mr. Kapil Wadhawan, Chairman and Managing Director of DHFL said, "We aim to grow at a margin of about 2.5 to 3 per cent targeting a portfolio of Rs 4,000 crore in the next five years".
The new loan segment will focus towards providing education loans for higher studies in engineering, business, management and new age courses like Aquaculture, Photo Journalism, etc.
According to Mr. Wadhawan, education loans business is still untapped by the non-banking entities which provides a large business opportunity with around 3 million students pursuing higher studies annually.
Avanse will be a subsidiary of DHFL with a capital base of Rs 50 crore and it will cover complete cost of education including living and other expenses. The company offers educational loans with minimum loan value being Rs 50,000 up with repayment tenure of up to 10 years.