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HDFC to buy 41% in education loan provider

14 November 2009

TNN 14 November 2009, 12:16am IST

Press Trust of India / Mumbai November 13, 2009, 18:29 IST
NEW DELHI: The country's largest home loan player HDFC Ltd will acquire 41% stake in education loan provider company Credila Financial Services.

With this, HDFC will enter a specialised education loan market, estimated at over Rs 30,000 crore.

HDFC is purchasing the 41% stake in Credila from DSP Merrill Lynch Capital Ltd, an Indian subsidiary of global financial services major Merrill Lynch. Commenting on the deal, HDFC's senior general manager (treasury) V S Rangan said that though it was a very small investment at less than Rs 10 crore, it will mark HDFC's entry into fast-growing education loan market, which is expanding at around 30% per annum.

"Education loan provides a large business opportunity in the country with more and more people going for higher studies," Rangan said. As it has become a very specialized market, HDFC decided to enter this segment through buying stake in a company, which has proper domain knowledge.

Credila Financial Services has disbursed loan of around Rs 16 crore in 2009-09. "Currently, the market is mostly dominated by banks, but the requirement for education loans is growing day-by-day. The company would disburse loan for studies in India as also overseas," Rangan said.

At present, HDFC Ltd offers very specialized education loan to students in select institutions like Indian School of Business (ISB), Hyderabad, Indian School of Management (IIM) Ahmedabad and Symbiosis, Pune


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