Indian banks are taking a cautious approach while reviewing loan applications from students looking to pursue education in Canada, given the recent diplomatic tensions between the two nations. Worries concerning visa opportunities and a less hospitable environment might prompt certain students to rethink their educational choices, said Ankit Mehra, Co-founder and CEO, GyanDhan, Delhi-based education financing marketplace.
“Lenders are a bit cautious when processing loan applications. We are seeing a pause or some delay in loan sanctions. However, as of now application volume hasn't dropped as yet though we do expect some slowdown there,” said Mehra.
Annually, the number of students going abroad for their education continues to surge. Data from the Indian Ministry of External Affairs reveals that more than 1.3 million Indian students are presently pursuing studies across 79 different countries. What's striking is that over 180,000 of these students have chosen Canada as their educational destination, establishing it as the second most sought-after country, trailing only the United States.
But the recent tension can make students shift their preference to other geographies. “If there is a delay or pause then students can look at other destinations for higher studies,” said Mehra.
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The diplomatic tension escalated when Canadian Prime Minister Justin Trudeau accused India of involvement in the assassination of a Khalistani terrorist. India vehemently denied the allegation and temporarily suspended visa services for Canadians.
"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 utmost caution," the external affairs ministry said in a statement on September 20.
According to data from the Reserve Bank of India, the outstanding portfolio of education loans held by Indian banks increased by 17 percent in FY23, rising from Rs 82,723 crore in the previous year to Rs 96,847 crore.
However, lenders that do not depend on Indian banks have seen no impact of the ongoing tension between the two countries. “While we appreciate the sensitivity of the current events, Prodigy Finance maintains our approach to providing education loans to international students headed to schools and programs in Canada. We have seen continued strong demand for business and STEM postgraduate programs with particularly strong demand for University of Toronto, McMaster University and McGill University. In addition, we have seen new student demand to expand our coverage of Engineering masters courses at University of Waterloo, University of Calgary, University of Ottawa and Simon Fraser University,” said Joel Frisch, is our VP, Global Acquisition at Prodigy Finance, which is fuelled by impact investors, and other private qualified entities who invest for earning a financial and social return.
Prodigy Finance is still providing education loans for incoming international students and is growing our support of Canadian schools and courses. We look forward to supporting over 300 courses in 2024. Applications are currently open for both the August-September 2023 intake as well as the January 2024 intake. Applications for the August-September 2024 intake will open towards the end of the year per our usual cycle, added Frisch.