Indian banks leery of Canada student loans due to ‘delay in loan sanctions…’

Given recent international tensions, Indian banks are wary when considering loan applications from Canadian students. Ankit Mehra, Co-founder and CEO of GyanDhan, a Delhi-based education funding platform, said visa concerns and a less welcoming environment may cause some students to reconsider their studies.

“Lenders are cautious when processing loan applications. The pause or delay of loan sanctions. However, application volume hasn’t plummeted yet, but we foresee a slowdown, added Mehra.

The number of students studying abroad grows each. The Indian Ministry of External Affairs reports that over 1.3 million Indian students study in 79 countries. Over 180,000 of these students chose Canada as their educational destination, making it the second most sought-after country behind the US.

However, the recent conflict may make students pick other regions. “If there is a delay or pause, students can look at other higher education destinations,” Mehra added.
When Canadian Prime Minister Justin Trudeau accused India of assassinating a Khalistani terrorist, diplomatic tensions rose. India strongly refuted the accusation and canceled Canadian visa services.

“In view of growing anti-India activities and politically condoned hate crimes and criminal violence in Canada, all Indian nationals there and those contemplating travel are urged to exercise great caution,” the external affairs ministry stated on September 20.

The Reserve Bank of India reported that Indian banks’ education loan portfolio rose 17% in FY23 from Rs 82,723 crore to Rs 96,847 crore.

However, lenders that do not depend on Indian banks have been unaffected by the tensions. While we understand the sensitive nature of the current events, Prodigy Finance continues to provide education loans to international students attending Canadian schools and programs. We continue to observe significant demand for business and STEM postgraduate programs, especially at Toronto, McMaster, and McGill. Joel Frisch, VP, Global Acquisition at Prodigy Finance, said impact investors and other private qualified entities who invest for a financial and social return have driven new student demand to expand our engineering masters courses at University of Waterloo, University of Calgary, University of Ottawa, and Simon Fraser University.

Prodigy Finance continues to lend to international students and is expanding its support of Canadian institutions and courses. Supporting approximately 300 courses in 2024 is our goal. Applications are open for August-September 2023 and January 2024. Frisch said applications for August-September 2024 will open late in the year as usual.