Microloans helping parents pay school fees during COVID-19 pandemic: Report

As per the information provided by the company, the number of parents has reached to over 12 lakh from 4 lakh, the previous year. File pic

Over 12 lakh parents from across the country, most of them from Mumbai, have taken a loan to pay the school fees this year, due to financial constraints amid the pandemic. This was revealed by GrayQuest - a financing company, which released a report of its growth in the past one year. Post the COVID-19 outbreak, there has been an increase in the number of parents opting for microloans for school fees, thanks to increasing associations of schools with the financial company. The loans enable parents to pay the fees in one go, while they can repay the loan in installments.

New trend
School fees are a major issue for lakhs of parents amid pandemic. Parents have been demanding several relaxations in school fees this year as many are facing financial crises. In the past one year, many private schools have been directing parents to such microloan providing finance companies which allow easy to repay loans. The growth report shared by GrayQuest clearly shows the increasing new trend in the education financing sector, over the past one year of the pandemic.

‘Three-fold increase'
As per the report, there has been a three-fold increase in the number of parents opting for education financing, due to pandemic induced salary cuts or business downturn, and the resultant financial constraints. As per the information provided by the company, the number of parents has reached to over 12 lakh from 4 lakh, the previous year. The company, in just the past one year has doubled the number of partnerships with educational institutions to offer loan services for education fees. Currently it has partnerships with over 2,700 educational institutions across the country, most of which are with schools - 2,400 as compared to higher education institutes with only 300 partnerships. The report also points out that among these partnerships, Mumbai has recorded the highest with 25 per cent, out of which 18 per cent have enrolled with GrayQuest only in the past one year.

Other metro cities such as Bengaluru and Hyderabad follow with 12 per cent and 11.5 per cent share of the partnerships, respectively. "The financial constraints caused due to the pandemic have enabled parents to dedicate more time to streamlining their personal finance and efficiently take financial decisions," said Rishabh Mehta, GrayQuest founder and CEO. The nationwide study by the company was based on an internal database of GrayQuest customers belonging to the age group of 25-55 years, during the period March 25, 2020 to March 20, 2021.

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No. of loan seekers in the previous year