Education Loans Register 17% Growth In Fy23
Education loans register 17% growth in FY23, turning positive for first time in five years
About the news:
• According to Reserve Bank of India (RBI) data, the outstanding portfolio of education loans increased by 17% to 96,847 crore in 2022-23, up from 82,723 crore the previous year.
• The priority sector education loans show growth of 0.9 per cent in FY 2022-23 which is significant because the growth in education loans was flat during 2021-22 & it was negative for the three years prior to it
Table
|
Financial Year |
Year Growth % (In negative) |
|
FY20-21 |
3% |
|
FY19-20 |
3.3% |
|
FY18-19 |
2.5% |
• The Non-Performing Assets (NPAs) in education advances stood at 7.82 per cent of a total outstanding portfolio of ₹80,000 crore at the end of the first quarter of FY23
Facts
Public Sector Banks in India disburse around 90% of education loans. Private sector banks and regional rural banks (RRBs) account for roughly 7% and 3% of total outstanding education loans, respectively.
Reasons for Non-Performing Assets (NPAs) in loans:
• Fresh job creation has not kept pace with the number of graduates coming out of the colleges.
• Limited job opportunities or a mismatch between the skills acquired during education and the job market.
• Financial crises affected overall economic conditions & job market, making it challenging for borrowers to repay their education loans.
Important takeaways for all Comptitive Exams:
• A Non Performing Asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days
• Dharmendra Pradhan is the Union Minister for Education
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