Education is prime these days for every individual. And many of the students with aspiring dreams are not able to fulfill those due to insufficient funds in their pockets. But these situations directly or indirectly hinder the growth of the student as well as the country too. GyanDhan works to facilitate funds for education abroad easily, let’s know more in the words of Ankit Mehra, who is a Co-Founder and CEO of the company which is India’s first education financing marketplace.
With what mission and objectives, the company was set up? In short, tell us about your journey since the inception of the company?
The company was set up with an aim to streamline the education financing segment to facilitate securing funds for education abroad easily. The drive to help students came from the personal experience and troubles to fund my MBA from IESE Business School. Mr. Jainesh Sinha joined me in my endeavor, who had also faced difficulties funding his education. After a thorough analysis of the market and the way banks and lenders operate, we concluded that there are gaping holes in the overall loan process, riddled with procedural delays, product limitation, archaic documentation systems to name a few. To optimize the process, we started with building an in-house evaluation model called the GyanDhan score that accurately calculates the loan eligibility of the student. The score is calculated after factoring in the academic profile of the student, their future earning potential, target course and college, and employment opportunities in that field. The objective was to move beyond the traditional markers of eligibility still in use, which is the value of the collateral pledged. The score assigned to the students helps the lenders and us assess the risk involved in the loan application. We partnered with major lenders in the market to further smoothen the process of documentation and further processing. The initial focus of the company was financing abroad education needs but recently forayed into the domestic segment to provide easy and accessible financing options to study in India. The company has been successful in its operations, helping more than 5800 students since its inception in 2016. The role of the company has also evolved since then as it recently acquired its NBFC license. The license enables us to handle end-to-end customer experience and provide a better service.
What is your biggest USP that diﬀerentiates the company from competitors?
The USP of the company is the customer-centric approach. The aim is to offer our customers the best possible experience of funding their education. We weeded out archaic loan application processes and introduced an entirely new approach for the online process, including the GyanDhan score that helps determine the eligibility of the applicant. Our loan eligibility tool matches the applicant to an ideal lender for their profile. Students have the option to discuss different loan products with the executive assigned to them, who goes through the profile and needs of the student to suggest the most beneficial and cost-effective lender. We do not hesitate to refer them to a lender that may not be our partner if that is the best recourse. It instills our aim and motto to help the students find the best possible financing option. The students we assist, more often than not, refer us to other students in need.
The entire financing experience is made hassle-free with the online process, which helps the applicant to secure funds without any branch visits and unnecessary document submissions.
How do you plan to revolutionize the Indian/US/UK market and what are your plans to tap the market?
There is a huge demand surge for education loans currently for multiple reasons. It is primarily because last year’s travel restrictions are lifting, and the pent-up demand for education loans is pushing through. One of our partners recorded a 209% growth in loans for education abroad in Q1FY22 over the first quarter of the previous year. Even though we are witnessing an increase in loan applications, the banks are yet to see the jump in their education loan book. The plan is to make education loans accessible from across the platform, including banks. Currently, the number of students benefiting from student loans is barely 6% to 7%. To reach a higher percentage of students benefiting from loans, we are using advanced analytics to identify the right set of customers that require such a service. The power of analytics is also used to make the loan process more efficient and accessible to the students. We have already seen positive results on this front and are working to expand this segment exponentially in the coming time.
What is the reason that organizations are using AI/ data analytics? How is your company utilizing advanced analytics and big data?
Now, more than ever, companies have realized the benefits of using AI/data analytics. The variety of data collected by companies provide valuable insights into customer behavior that has enabled them to formulate personalized marketing pitches, introduce new products, make better business decisions, and mitigate risks. Decisions taken are better-informed and backed by data. It is especially helpful in the education loan sector because of the looming risk of NPAs. GyanDhan utilized data analytics to optimize every step of the loan process from checking loan eligibility to building tools that assist students in perfecting their admission applications. Our most successful tool developed is the loan eligibility tool that does multiple things. It assigns students a credit score that calculates their creditworthiness; it matches them with an ideal lender based on their profile and loan product features. The automated process further helps us identify bank executives that can handle more cases based on their past performance and other metrics. Traditional lenders still follow the conventional modes of evaluation, recording a higher percentage of NPAs mainly because the decision taken is intuition and collateral-based.
Another tool that uses advanced analytics is our SOP review tool. It uses NLP to analyze the SOP and helps students refine their essays. The automated writing assessment gives formative feedback to students that are further used to improve the result for subsequent users. The efficiency of the model increases with each SOP that we receive. As for the data collected in our repository, it is kept private and not shared with anyone.
What is the edge your company has over other players in the industry?
GyanDhan is a data-driven company. Every decision, tool, and loan process is backed by data we have aggregated over the years that helps the company, our partner lenders, students, and every party involved. Since the inception of the company, we have seen loan approval rates increase significantly. The GyanDhan score is trusted by lenders in the market, which has made the decision-making process an easier and faster exercise. Earlier, applications that would be outrightly rejected, and are still rejected by traditional lenders, stand a chance with our evaluation model since the decision taken is not intuition-based. The services offered are free of cost for the students as the company gets paid a percentage of the loan amount as fee income.
In addition to this, the company is also an NBFC that helps cater to customers that are largely neglected by traditional lenders and fail to find any financers. The customer experience is optimized; applications are evaluated objectively; students get approved for low-ticket loans.
Another revolutionary product that the company introduced recently is GyanDhan allied – where we leverage the power of group buying to get the best financing deals for the student.
What is your leadership mantra?
One basic rule that the company follows is to hire the right people and let them do the work. Each employee brings their work style and performs optimally when they are not hounded for work. We have seen employees take initiative to improve the operations and bring business to the company. These employees are appreciated and even promoted irrespective of the time they have spent in the company.
Would you like to highlight a few use cases where analytics has benefitted the organization tremendously?
Predictive analytics helped us identify sources that can get us more leads and business purely based on past performance and trends, which, in turn, resulted in tremendously improved conversion rates with our partners. As I mentioned earlier, we have seen a significant increase in the approval rates since employing analytics to figure out optimum sources and further optimize the process. With reduced cost and faster decision-making capability, we were able to launch a completely new product targeting students looking to pursue an MBA with the help of our in-house evaluation model, the GyanDhan score. The score not only calculates the loan eligibility of the student but also determines the future employability of the student and their repaying capacity, a crucial aspect to keep the default rate at the minimum.
What are the concerns that organizations have before using analytics?
The foremost challenge regarding data analytics is to determine which data to use, how to source it, and make use of it for the benefit of the company. Collecting data is not the endgame, it is just the start. The second challenge is finding the right professional. Analytics is highly math-intensive and requires the right skill set, the right use of mathematical techniques, and statistical methodology to get meaningful insights from the voluminous data collected every minute. A great deal of effort is required to find a professional who is not overwhelmed by the large amount of data acquired and can model the results for the company’s benefit. Another challenge that most companies encounter is to take those insights and reform the way the company operates. If the analytics is not helping you make better business decisions or changing the way managers work on a day-to-day basis, then company resources are being wasted.
Another major concern with analytics is data security and privacy. As a company that extensively uses and stores data to provide better service and tools, we understand the concern of data accessibility. Companies must build a system that safeguards their customers and ensures the data does not get into the wrong hands.
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