Education Loans Segment of Banks-Marketing Strategy

Project Report on Education Loan growth to slow down

Marketing Strategy of  Education Loans Segment of Banks in India

Dissertation Proposal on Education Loans Segment of Banks-Marketing Strategy in India

 

Growth trajectory of education loans to slow down 

 

The education loan segment has grown at a 6-year CAGR of 40 per cent to reach Rs 428 billion in 2010-11 from Rs 56 billion in 2004-05. Demand for education loans has seen a spurt in recent times and the southern regions of India, such as Kerala and Tamil Nadu, have seen especially high demand. However, CRISIL Research estimates growth to decelerate going forward, and the segment is expected to clock a 4-year CAGR of 20 per cent between 2010-11 and 2014-15 to reach a size of Rs 888 billion. The expectation of slow down is attributable to the cautious approach being adopted by banks in light of increasing NPAs and also due to the large base effect.

Source-RBI, CRISIL Research

Private professional courses igniting demand for education loans

 

The education industry in India has seen a rapid transition from publicly funded general higher education to private professional courses dominated by engineering and management institutes. The major consequence of this mushrooming growth of private sector in higher education is high user costs. Private professional institutes entail exorbitant tuition fees, making higher education increasingly expensive. Thus, the trend of financing education through loans has picked up - a trend uncommon just a few years ago.

The recent 66th round of the National Sample Survey Office (NSSO) reveals that between 1999 and 2009, spending on education in general jumped by 378 per cent in rural areas and 345 per cent in urban areas of the country. However, in terms of expenditure on education as a percentage to GDP, India still lags behind most developed nations.

Finance penetration much lower than developed nations

Even though education loans are now popular across all segments of the Indian society, less than 3 per cent of the students in India avail of the facility, against a whopping 85 per cent in the UK, 77 per cent in the US and 70 per cent in Germany and France. According to a study by the Associated Chambers of Commerce and Industry of India  (ASSOCHAM), most of the education loan borrowers in India belong to middle income families.

Research Objective

 To compare education loan schemes and policies of the Punjab National Bank (PNB), State Bank of India (SBI) and Hong-Kong Shanghai Banking Corporation (HSBC)

METHODOLOGY:

In this research I have adopt the Exploratory Research method only for PNB, SBI and HSBC Education loan schemes for just compare the offer document of these three banks.

DATA SOURSE:

 

 Primary data is taken from various internal documents and circulars issued by the banks from time to time and Secondary data is taken from different books and financial information published in newspapers and from the banks websites and other related websites.  

SCOPE:

Research scope is only three banks and these three banks are State Bank of India (SBI), Punjab National Bank (PNB),and Hong-Kong Shanghai Banking Corporation (HSBC).

LIMITATIONS:

There are some limitations in this research; these limitations are as follows –

·        Time limitation

·        Many banks provide education loan but in this research only three banks are taken for consideration.

·        Expenditure on research

·        Some banks are not provided their internal information/circular.

        

 

Education loans can augment the boundaries of what you can achieve
 Education never ends – it is not said without reason. We are educated all our lives and getting an education not only is a great achievement but something that gives you the tools to find your own way in the world. Education is indispensable; little do we realize how much more it can bring to us in terms of worldly amplifications. Anyone can have propensity and the natural endowment for education. But one might not have the resources to finance their education. You certainly can’t let lack of resources impede you from advancing your prospects through education. Then you accidentally stumble upon the word ‘education loans’. Loans for education – you have never thought about it as a feasible arrangement. Education loans can open newer panoramas in regard to your education aspirations.

Education loans are open to all people in all its myriad forms. Education loans can realize your education plans or the education plans of your children. You can strengthen you own future and the future of your son or daughter with education loans. An extensive range of student and parent loans are presented under the category of education loans. There are many types of education loans. Discerning about the types of education loans will help you in making the accurate decision. The single largest resource of education loans is federal loan. The two main federal education loan programs are the Federal Family Education Loan Program and the Federal Direct Loan Program. In the Federal Family Education Loan Program the bank, credit union or the school is the lender. While the federal direct loans program, the department of education is the lender.

Private education loans are offered to people so that they can provide financial backup to their education plans. Private education loans are not endorsed by other government agencies but are provided by other financial institutions. Private education loans program are optimum for both undergraduate and graduate studies.

Formal education is requisite for future success. Though this is not a hard and fast rule, but education certainly helps you in gaining an upper hand. With universities getting expensive by each day an education loan will certainly give you an incentive to go ahead with your education plans. Each year while contemplating on your education plans the thought of finances almost invariably comes in. While working towards you degree, you are constantly plagued about paying for the education fees, books, and other living expenses. Education loans can provide funding for tuition fees, board and room, books computer, and even student travel. An education loan can help you with all these expenses. Education loans are sufficient enough to take care of all these expenses. If you have been forced to drop your education for any reason, you can still take up your education at any point of time. Irrespective of your age and also where you have left your education.

There are no specific eligibility criteria for education loans. Any person who is in need of sponsorship for education can find an education loan that befits his or her financial necessity. Loan amount on education loans vary with the kind of education you want to pursue. The repayment options with education loans will similarly accommodate your personal financial preferences. You can either repay interest amount while still in school or six months after graduation. Education loans offer up to ten years for repayments. The refund alternatives on education loans also include deferment, forbearance and consolidation. The various sites on education loans can give you innumerable repayment options and monetary remuneration.

Education loans will help you in planning your life after graduation. However, an education loan like every loan is a huge financial obligation. An education loans is generally the first substantial loan for most people and therefore the first major expense. Do not be completely dependent on your education loans for the funding of your complete education. Try to apply for any other financial sustenance like university grants, scholarships, fellowships, work study programs and assistance ship and any other form of aid. This will certainly encourage a fluid dispensation of your education loans. You can start by going to the financial aid office in your school or university. It will provide you further insight to the kind of education loans, you must apply for.

Education is an experience of life. It is so rewarding in itself that it helps you to manage almost everything in your life. Education loans discipline your impulse towards education and training into a fruitful contrivance. The payoff is delicious in terms of improved quality of life. Education is expensive! Is it? With education loans it can’t be. Now, you don’t have to take the road in front of you. Make your own road with education loans.

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