According to a recent report by Crisil Ratings, education loans, particularly those used to finance overseas courses, are set to remain one of the fastest-growing segments for non-banking financial companies (NBFCs) due to the increasing demand for higher education. The assets under management (AUM) for these loans are projected to grow by a robust 40-45% this fiscal year, surpassing Rs 60,000 crore.

After witnessing substantial growth of over 80% and 70% in fiscals 2023 and 2024 respectively, the AUM for NBFCs’ education loans reached Rs 43,000 crore as of March 31, 2024.

Crisil Ratings highlighted that despite specific concerns in some countries, the asset quality metrics are expected to remain stable. The report also noted that NBFCs have shown resilience in portfolio performance, backed by strong credit underwriting.

As of March 31, 2024, the 90+ days past due (dpd) rate for education loans in NBFCs stood at 0.2%, significantly lower than the gross non-performing assets of 2.0% and 3.9% reported by private and public sector banks, respectively. Additionally, peak quarterly delinquency in the vintage pool of 90+ dpd for NBFCs remained below 1%.