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The Rise Of Edutech Finance Cos: Education is no more non-profit
- Startups offer funds on zero to 8 per cent interest
- Parents forced to register with fintechs to pay fee
Hyderabad: Government orders and court verdicts may claim that education is a non-profit activity. But in reality, educational institutions have become money-minting and profit-oriented organisations, which are more concerned and focussed about having swanky buildings, AC rooms, AC buses and over-all personality development of a student who can be made fit to face any challenge in life.
The latest trend or call it innovation in these hi-tech schools is new ways of using technology which turns parents into debtors of fintech companies via schools and colleges for years somewhat like farmers indebtedness to private money lenders.
Of late, several schools and colleges have entered into agreements with EduTech finance companies. Startups have entered the arena of education financing which had skyrocketed to unimaginable levels. Even for LKG, one has to shell down over Rs 1 lakh as fees.
Naseer (name changed), parent of a student of CHIREC international school, was told that May 10 was the last date to pay the first term fee while August 10 and December 10 are the dates by which second and third term fee must be paid and for that it was mandatory to register with Education Fintech company Jodo.
He said he thought of admitting his children in this school as they claim to be international schools following Baccalaureate (IB), Cambridge and Central Board of Secondary Education (CBSE) system. He said his two children were in class VIII and IX but the new rules were causing problems.
Chandrasekhar (name changed), a school manager, told Hans India that Jodo is not the only fintech company in this business. There were several such companies like Finance Peer, Eduvanz, Gyan Dhan, and Leap Finance, etc. All of them are startups.
He said these companies offer a "Solution as Service" (SAS). The school outsources its entire fee collection and accounting administration to the company. They collect charges based on the value of transactions in the case of ECS mandates from the school. They offer finance from zero to anywhere with 8% interest," he said.
Interestingly, all of them were floated by alumni of the IITs or IIMs, prominent business and technology institutions. Some of them are tied up with NBFCs, some others draw their sources to run their EdTech Finance companies and Apps backed by prominent venture capitalists from within the country and abroad.
