Accessible and affordable education loan crucial to achieve skill development goal

Millions of students in India who cannot pursue higher/vocational education due to lack of finance is a matter of grave concern, and a major obstacle in fully harnessing the potential of young population of the country. The one who cannot afford cost of education thus remain skill-less and unemployed, which leads to distortion in socio-economic development of the nation. The problem is more striking for students from rural areas majority of who are deprived of loan facility. Also, the current system has failed girls because gender bias in the society keeps them out of education ambit due to unavailability of finance for education.

Here is what I expect from government on education front –
         

Credit guarantee fund

Create a credit guarantee fund similar to one created for MSME sector in India. With this trust, banks can finance education loans without any collateral from students. For rural students, banks should offer loans at concessional rate and with 100% guarantee from the trust. Also, in case of default, the trust will need to pay 75% of the loan to banks.

Mahila Bank

Mandate Mahila Bank to finance education loans of girls pursuing higher/vocation education, particularly in rural areas. Banks should offer loans on personal guarantee of parents and without any collateral.

Lien on future earnings

Student loan financing should move from collateral based to lien on future earnings.

Micro-financing

Guaranteed by self-help groups, micro-finance facility to students could provide a breakthrough in financing millions of socio-economically underprivileged students.

About Mr. Ninad Karpe, MD & CEO, Aptech Ltd

Ninad Karpe is the MD & CEO of Aptech Ltd, a global education company. Ninad started his working career as a Consultant, advising companies seeking to invest in India. During this stint, he authored several books on strategy, taxation and foreign investment in India. He regularly contributes to newspapers, magazines, journals and is a renowned voice of the education sector on prominent business channels.

He also visits management schools to speak on business strategy. In his pre-Aptech avatar, Ninad was the MD of CA for India & SAARC countries. (CA was formerly known as Computer Associates). In his capacity as MD of the Indian operations of CA-the world’s fourth largest software company, Ninad was responsible for leading the adoption of CA’s technology reach and strengthening strategic partnerships in India. Ninad joined Aptech Ltd as MD & CEO in February 2009 and since then has been aggressively driving strategy to position Aptech Ltd as a global learning solutions provider.

Aptech presently operates in India and 40 emerging countries across the world including China. He is a regular blogger (www.reformingeducation.in) and is an independent director on the board of a few public companies. Travelled far and wide all over the world, Ninad has a rare but an interesting hobby of home wine-making.