Quality education is a must for a complete and successful life. For many, it is equivalent to graduating from a top institution. The cost of education is however increasing rapidly. In fact, the cost of studying at reputed institutions is already quite high. Keeping this in mind, parents, who want to provide their children with the best possible education, invest their money in mutual funds, fixed deposits, unit-linked insurance plans, etc., for the long term.
But despite all this, one may still encounter a shortage of funds. An education loan, therefore, plays a vital role in such a scenario by helping to bridge the gap between the shortfall and the required amount. But less than 3% students, mostly belonging to middle-income families in India avail of education loans, against 85% in the UK, 77% the US and 70% in Germany and France, according to a study.
The study also highlights, that though there are many schemes for providing financial aid to poor students, however the amount given is very low and procedure to avail the facility is very cumbersome. That is why the percentage for education loan seekers is extremely low. Moreover, Education Loan is the second largest asset class in the USA, with over $ 1.2 Trillion worth of total student loans outstanding. Despite India’s population being four times that of the USA, all lenders put together, the total Education Loan portfolio outstanding is just about $12 Billion.
Thus with an aim to pioneer the private education loan industry in India, Ajay Bohora & Anil Bohora launched India’s First Dedicated Education Loan Company, Credila, which focuses exclusively on funding students for their higher education in India and overseas. What HDFC Ltd. is for Home Loans, Credila is for Education Loans.
Ajay Bohora is the Co-Founder & MD of HDFC Credila Financial Services, an HDFC Ltd. Company. He has earned Bachelor of Engineering from VJTI, Bombay University and MBA from Hofstra University, New York.
He started his career with Tata Exports Ltd. and then went to New York to pursue his MBA. After that, he worked in the field of Finance at various positions for six years at MetLife in its New York offices. After 8 years in the USA, he returned to India, to start a joint venture in partnership with a USA Company.
With a track record of success, in 2006, along with his brother Anil, he founded Credila, which provides Education Loans to students for their higher studies in India and abroad. While he was pursuing this career, due to his immense passion for Education, he co-founded New Era English School in Nasik, along with his family. New Era English School has been recognized by The Week Magazine as one of the “Top 10 Most Innovative Schools in India”.
Moreover, he has served as the Member of the Sub Committee on ‘Student Financial Aid’ of Government of India, Delhi. He has served as the member of the Senate of 125 years old prestigious Engineering Institute: VJTI, Mumbai. He has also served as a special invitee to one of the committees of the University Grants Commission UGC. He has also served as a member of Higher Education Network, FICCI, Federation of Indian Chamber of Commerce and Industries, Delhi. He is a recipient of “Engineering Achievement Award” by The Institute of Engineers (India) for the year 2007-08 and the “Emerging Leader of the Year Award” in 2012-13.
A Successful Partnership
Ajay attributes his success to a lifetime partnership with his brother Anil. Anil Bohora is also the Co-founder and Managing Director of HDFC Credila. He is also a member of the Board of Directors of HDFC Credila. His professional experience includes diverse technological and managerial areas.
He has held senior management positions from start-up to large corporations including AOL Time Warner, Pitney Bowes, etc. where he was responsible for successfully managing the design, development, and implementation of large complex systems to reduce cost and increase efficiency by outsourcing critical business processes. At AOL Time Warner he was responsible for managing large business relationships.
He has received his Bachelor of Engineering (Electronics and Telecommunications Engineering) from College of Engineering Poona, India and earned his Master of Science (Electrical and Computer Engineering) degree from Ohio University, USA.
“We have been privileged to have a loyal, dedicated and hardworking team. Their future prospects while the value creation is done, keep me going through difficult times. What also motivates me is a quote I once read, “When the going gets tough, the tough get going!” shares Ajay.
An Epitome of Perseverance
“The test of a true entrepreneur is to do more with less for more,” says Ajay. For his first entrepreneurial venture, the challenge was to get a joint venture partner in an industry he had no background in, no capital to invest and no track record. Even though it sounds unbelievable, with 6 months of passionate dedication and thousands of literal cold calls Ajay ended up with joint venture partner from Iowa, USA with 49% equity, which after scale up, he sold to WNS.
In the second venture, Credila, the challenge was to enter the education loan industry without any background, find a strategic partner, scale up, become profitable, and pioneer private education loan industry in India. It took at least 20 visits to the USA about one year of efforts, laser focus on the mission and depth of conviction to get over hearing hundreds of ‘Nos’, before Merrill Lynch of New York decided to invest from India to anchor Credila.
“Being partner with Merrill Lynch to becoming part of Bank of America to having Indian financial powerhouse, HDFC as our strategic investor worked out due to our sincerity, honesty & passion!” shares Ajay.
Credila (now called HDFC Credila) has achieved many milestones in its journey. It has so far, has funded tens of thousands of Indian students studying in over 2100 Institutes, across 35 countries around the world. It has disbursed a cumulative of over INR 6,200 crore of Education Loans since inception.
“Our parents continue to be our role models. They have impacted our entrepreneurial journey. Their honesty, sincerity, hard work and loyalty lead the foundation of our lives,” says Ajay. Live life with goodness has been the philosophy with which they are setting examples.
Advice for Young Entrepreneurs
“Entrepreneurial skill is a natural calling of the person! It’s the passion! The best part of being an entrepreneur is the opportunity it presents to create jobs, transform lives and contribute towards the nation building!” asserts Ajay.
He strongly believes that for any and every entrepreneur, failure is a part of life. Failures teach the best lessons of life. Although there have been no major failures for him, setbacks have been quite frequent and huge! These days, disruptions are omnipresent across industries! Being able to learn, unlearn and relearn as a corporate culture is the only way any organization can reinvent itself to be able to leverage emerging opportunities presented with ongoing disruptions.
Ajay is highly inspired by the entrepreneurial journey of Steve Jobs, his struggles, his life, his failures and his accomplishments, despite extreme odds he faced all along since the time he was born! “Like me, many budding entrepreneurs might find the biographical books around Steve Jobs and his life quite motivating,” advices Ajay.
Building Unique Attributes into Credila
“Until the economies of scale come into play, remaining focused and leveraging resources is highly critical to contain the cost of operations,” asserts Ajay. Moreover, in the context of high defaults of education loan industry, with an absolute focus to carry on HDFC Ltd.’s’ legacy of building high-quality portfolio of loans, HDFC Credila uses its domain expertise to ensure that NPAs remain quite low.
HDFC Credila has created & engaged with the eco-system to add value at each touch point in the life cycle of students for higher education. An unconventional approach was adopted & a value proposition matrix got created for the eco-system with Credila’s deep insights & domain expertise. A global network of partners got hand-crafted with strategies & passion. Students’ communities got created on mobile platforms. Special privileges and offers have been curated under the CredilaOneStop platform, as a value-added service for students.
At HDFC Credila, they revolve the corporate culture around three things: Co-creating products & services with the eco-system, value-added customer experience, and passionate Team HDFC Credila driving it!
Embarking towards the Future
The pace of change in today’s world in mind-boggling! It’s extremely critical to learn, unlearn and relearn every day, to develop as an entrepreneur. Ajay reads for a cumulative period of about two hours a day. He also takes efforts to meet new people primarily from unrelated industries and unrelated organizations so that disruptions occurring in their fields and their learnings can be quite valuable for him to grow as an entrepreneur! Professionally, HDFC Credila looks forward to crossing US$1 Billion mark in the total disbursed amount of education loans by HDFC Credila in the next 12 months.