With tuition fees later, the fintech industry is transforming education in India
Learning has become an ongoing process. It is not limited to schooling or college degrees anymore. We have seen that higher education is considered a necessary part of personal and professional development. The education ecosystem has been changing rapidly in recent years. Due to post-pandemic technological advances, physical education modes have rapidly shifted to online classrooms. The pandemic situation in the world has forced even the most renowned universities and schools to turn to digital platforms. This leveled the playing field for edtech startups that leveraged the digital space to provide education, which initially resulted in tremendous growth for edtech companies.
The new fintech education solutions came into the picture and are gradually filling the funding vacuum for education. Fintech options for education solve problems with traditional financial methods. According to the recent report by Technavio on online education market, India’s online education market is set to grow at a CAGR of 21% between 2020-24 to reach a market size of $14.33 billion.
This has resulted in constant innovation in the fintech space for education. Using digital and technology-enabled resources, this segment strives to bridge the gap and thereby transform the education finance market. As technology advances, unlike traditional institutions that spend time processing Edtech loans, digital app-based lending solutions are making it more accessible and user-friendly with flexible repayment models that suit learners across categories.
Below are some key aspects accelerating the growth of fintech solutions in the education sector:
- Access to affordable education – Most traditional financial institutions have traditional structures to approve fewer categories of student applicants and limited geographic coverage through their branches. However, the fintech industry has completely changed this scenario. The fintech platforms’ financing solutions reach out to a wider demographic segment through their broad-based insurance policies, thereby impacting students across categories from Tier 1 to Tier 4 cities
- Customized financing – To meet the needs of students, parents and institutions, the emerging education industry requires customized financing solutions. When developing financial products, it is crucial to consider different student segments, course outcomes and institutional performance. Fintech funding platforms are heading in this direction. Fintech platforms meet current market requirements and create optimal financial products. For example, some platforms have created loan products that require students to pay a low EMI during the course. When you finish your education and get a job, you can also pay higher EMIs. It was created for students considering their current financial situation. Furthermore, the right lending product provides a win-win situation for all parties involved. Fintech platforms integrate educational institutions into the funding ecosystem. The courses offered are value-based and comprehensive, which helps to ensure the students’ ability to repay.
- Agile, flexible and scalable infrastructure – Traditional financial institutions adhere to a rigid system that does not accommodate the complex structures of the education system. While fintech platforms offer a flexible approach that can accommodate students’ different funding needs based on their educational preferences. A creative, paperless app helps students easily access lending institutions, seek instant approval and complete the loan process in minutes 24/7.
- Deeper Penetration in Bharat – India needs innovative technologies that can take educational development to tier 2 and 3 cities in the country. Digitization and technology have reached every corner of our lives and this needs to be adapted to tackle inefficiencies. The revolution technology can play in such a setup is enormous. Today with 4G and 5G (coming up), mobile penetration has reached the masses where people can have more mobile connections than bank accounts. EdTech firms are also making the most of this opportunity. They seek maximum alliances with Fintechs to promote affordable education across student segments. Today’s Fintech apps offer differentiated EdTech offerings, and the market encourages users to use and spread the word.
The bottom line
The education ecosystem has evolved with increasing job opportunities in areas as diverse as graphic design, hospitality and interior design. Once confined to schools and colleges, education now has its roots in competency-based courses. The growing demand for professional education in aviation, nursing, soft skills, vocational training and educational technology courses is creating a huge demand in the fintech sector for education.
This improved, targeted approach democratizes the financial offers and thus safeguards a larger student ecosystem with flexibly adapted solutions. This provides equal opportunities to learn, have quality education and help for timely upskilling.
Disclaimer
The views above are the author’s own.
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