Mumbai, May 11 (PTI) Hit by the second wave of the pandemic, education-focused non-banking lender Avanse Financial Services is eyeing 12-15 per cent loan growth this fiscal over its FY21 loan book of Rs 3,103 crore, as it expects the first quarter to be a near-washout.

With the almost 90 per cent of the country under lockdowns and the Western education institutions almost closed for Indian students due to the pandemic, the Warburg Pincus and IFC-promoted firm had its loan sales plunging more than 50 per cent in April.

Avanse is hoping that Western countries open their colleges and education institutes from July, as the lion's share of its business comes from funding foreign education of Indian students, says its chief executive Amit Gainda.

Despite the pandemic challenges, the company could increase both its loan book and bottomline in FY21.

The overall loan book grew to Rs 3,103 crore from Rs 2,993 crore in FY20 and net income grew to Rs 38 crore for the year, Gainda told PTI.

But given the second wave, he expecte Q1 to be a washout and a muted H1. The company may be able to grow only 12-15 per cent this fiscal, and that too if the Western nations open up after the summer semester, he noted.

He further said the company is heavily dependent on loans for foreign education, which stood at more than 80 per cent of the Rs 1,800 crore overall education loan book in FY21.

The company made a pandemic provision of Rs 15.46 crore in FY21, taking its provision coverage ratio to 75, up from 46 in FY20, Gainda said.

Gross NPAs in education loans were at 0.44 per cent, from 0.26 per cent in the previous year, while the overall gross bad loans stood at 1.79 per cent in FY21 from 1.58 per cent in FY20.

Gainda said the overall education loan market is Rs 1 lakh crore and has been growing at 7 per cent annually from FY17. HDFC arm Credila and Avanse control just about 10 per cent of this market.

Since its founding in 2013, Avanse has given working capital to over 500 educational institutions catering to over 6 lakh students and has supported over 1.2 lakh students across 12,000 institutes in over 50 countries.

Avanse provides education loans to students from school to post graduation; loans for international and domestic higher studies; school fee financing; and working capital loans to educational institutions.

Initially promoted by a subsidiary of the erstwhile Dewan Housing Finance and World Bank arm International Finance Corporation (with 20 per cent equity), from July 2019 onwards it has been 80 per cent owned by the global private equity major Warburg Pincus after it bought out Wadhawan Global Capital.

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