An in-depth look into Decentro’s customer GyanDhan, and how they were able to build a smooth credit flow and simplify education loan financing via banking APIs.
How Decentro helped GyanDhan to Simplify Education Loan Financing?
An engineer by culture, but a Marketer by choice. Loves building great products that create a difference. On the lines of being a full-stack marketer.
Table of Contents
It’s the year of Exposure for the optimists and brain drain for the pessimists.
Confused?
Let’s let the numbers do the talking.
- Over 2 lakh Indian students went to study abroad in US in 2021-2022: Report
- According to a RedSeer report, it’s estimated that 1.8 million Indians will be spending US $85 billion on education overseas by 2024.
- A surprising trend among Indian students studying abroad is a preference for specialized courses. 52% of students intend to seek niche courses.
- Most students from Andhra Pradesh, Punjab, and Maharashtra migrate abroad, which are among the richest Indian states with presumably high awareness of the benefits of foreign education.
So exposure for some, brain drain for others, the fact of the matter is, the talent pool of the country between the age of 18 – 29 are actively looking for ways to proliferate the markets, way beyond the confines of this country.
Now while dreaming is good, in the case of education in a developing economy like India, always comes at its own cost.
“Astronomical” is the adjective that is generally attached to the estimated cost of pursuing these academic dreams. In such a scenario, educational loans become a support system for students unable to afford such exorbitant expenses.
The bridge between lack of finance at the student’s end and/ or limited access to external credit, is the only way to maneuver around the world of student loan financing.
Today, let’s take a look at how one such bridge in the form of the GyanDhan. With the intent of being an education financing marketplace, they look to fund the students of their choice, either through loans or scholarships.
What is GyanDhan?
Touted as India’s first and largest education financing marketplace, GyanDhan aims to equalize and expand access to education. Providing end-to-end education loan assistance, GyanDhan, with its digital-first company, has its eyes set on democratizing education. With a curated list of various lenders — from banks and NBFCs to even individuals — the aim is to fund students of their choice through loans or scholarships.
How does GyanDhan work?
GyanDhan’s USP lies in its unique way of assessing the eligibility criteria for loan seekers. With the focus on ability, the ethos of the loan disbursement process takes into account the future employability of a candidate. Breaking away from the norm of assessing family assets, the system in place checks on factors like whether graduating salaries are commensurate with the cost of education.
The finer details of the same look like this below.
To assess students’ loan eligibility, the startup has built a proprietary risk-scoring model known as the GyanDhan Score. It analyses students’ financial and academic data and predicts their future employability to assign them a credit score, which determines their eligibility.
Once the GyanDhan Score model was in place, GyanDhan started bridging the lender chain by partnering with loan providers, ranging from PSUs, Private banks and education-focused NBFCs, and recently even international lenders.
That’s not all, being a complete study abroad solution, GyanDhan’product suite is inclusive of
- Offered Scholarships
- University compares
- Travel / Forex Card
- Free SOP Review
- Events and Meet-up
- Admit Predictor
- Accommodation
- Discussions
What were GyanDhan’s key challenges?
The lending business is tricky. Between high-value disbursals and recollections, Gyandhan’s choking point became Cashflow Management and automated instantaneous disbursals
With every disbursal of a loan, reconciling transactions became a task. The increased fund flow, coupled with the traditional disbursement cycle, would prove to be a crucial challenge as it translated into delayed timelines.
Furthermore, with this high value and volume of fund flow, It was riskier to let this run manually for a long time.
How did Decentro empower GyanDhan?
Decentro’s API product suite enabled GyanDhan to offer a smooth credit flow and extinguish any reconciliation hassle.
- Empowering lenders and loan seekers alike via lender’s account
The promise of secure transactions on the back of lenders’ accounts (with account numbers) for Gyandhan’s lenders and loan seekers came in Decentro’s Restful APIs. Furthermore, the entire lending cycle has been taken care of- right from verifying the background of the lender & store owner via KYC APIs, accounting management, disbursals, and repayments.
- Efficient tracking and bookkeeping of transactions via Virtual Accounts
The challenge of tracking the source of transactions and bookkeeping them for Gyandhan was solved by using Virtual Accounts API. Eliminating the expending time, effort, and capital for payment reconciliation, GyanDhan leveraged the efficiency of ledgers created for each disbursal to reconcile payouts to the loan seekers, without hassle.
What were the key outcomes for GyanDhan?
The banking APIs provided by Decentro have propelled GyanDhan down the scalability curve. Let’s look at the advantages Gyandhan derived out of this tech-first partnership
- 20,000+ Successful API transactions
- 1000+ Disbursals done already
- Real-time payment reconciliation that saves time, effort, and capital for the platform
- 5X reduction in collection costs while extending credit facilities
- 10X faster integration timelines.
- Availed Decentro’s multi-channel customer support for any queries or resolution
- Employed robust payments & collection APIs with >99.9% uptime and a few hundred milliseconds response times.
In Conclusion,
The aim to empower fintech players has found its fruition through our partners. That’s precisely what our simplified banking APIs are here for! It’s not just the reconciliation, management, and settlement of payments alone. Our host of products has solved pertinent use cases for customers across the industry. From bank accounts, payments, wallets & cards, lending and KYC helps your business to simply integrate financial and run workflows smoothly.
We trust the likes of JumboTail, MoneyTap, and FamPay in running their banking needs and enable their business use case via the exhaustive product suite.
Are you a fintech platform struggling with a focused use case or looking to align your financial wellness? We would love to help you figure this out. Together.
