“We find it our responsibility to create a sustainable business model out of HDFC Credila where more students can get education loans for their higher education in India & abroad” says Ajay Bohora – Cofounder & CEO at HDFC Credila
The era we are living in may be well described as ‘the golden age’ of entrepreneurship; the era, where entrepreneurship and innovation form the bedrock of economic development of a nation. The spark for contributing to the welfare of the humanity fuels the desire for entrepreneurship and motivates the new-age entrepreneurs to push forward such ideas and concepts.The world treasures those influential entrepreneurs, who have made a difference in the lives of millions of people introducing ideas filled with brilliance. Holding onto innovation, they have set on a journey with impassioned enthusiasm to change the world around them. Traversing which, they endured moments of darkness but they couldn’t be stopped. They learnt their lessons and moved on as they were guided by their passion to succeed. They tookgiant strides in uncharted territoriesand endeavored to explore solutions that have never been sought; solutions that have created landmarks impacting society and shaping business landscapes.
While treadingon the journey dedicated to pick out the most distinguished corporate leaders, The CEO Magazine came across an opportunity to interviewMr. Ajay Bohora, one of the glorious gems shining in Indianentrepreneurial universe. Ajay Bohora – The man, who revolutionized and pioneered Indian landscape ofprivateEducation loan industry with his brainchild, HDFC Credila Financial Services – the educational loan specialist; the a topnotch entity that has etched its name as the pioneering leader in the panorama of educational loan services.His career took off as an Engineer with Tata Exports Ltd. His dreams of receiving quality education for MBA took him to Hofstra University, New York. However, the path he travelled was full of hurdles. “We couldn’t get the educational loans for ourselves even after having good academic credentials in engineering”. Both the brothers had to depend upon borrowed money from relatives to pursue their dream education. This concern ignited the passion for entrepreneurship somewhere deep-seated in the corners of the heart. The next six years after MBA observed his career growth at MetLife, New York; his stint here equipped him with profound experience in Finance.
Having developed a solid background in this domain, Mr. Bohora along with his brother Anil decided to set his foot in entrepreneurial journey inspired by thedesire for contributing to the welfare of his homeland. This resolution led to the launch of a healthcare focused BPO which was incorporated as a joint venture in partnership with USAentity.The brilliance and expertise of Bohora brothers steered the company through rapid growth and pushed forward its entry in the market as an innovative concept. The global BPO giant, WNS Global Services acquired the company and Ajay got to serve on the Board of Directors of WNS Global Services, which at that time was a home to 20,000 employees. This background in compelling leadership gave his career an edge and brought out the thought leader in him. His efforts towards contributing towards the nation building through education envelop higher education. He had co-founded New Era English School in Nasik. The school thrives as one of the ‘Top ten Most Innovative Schools in India’. His career portfolio is enriched with several leadership roles he assumes with some of the most revered organizationsin India. These majorly include:
- Member of the Sub Committee on “Student Financial Aid” of Government of India, Delhi
- Member of the Senate of 125 years old prestigious Engineering Institute – VJTI, Mumbai
- Member of Higher Education Network, FICCI, Federation of Indian Chamber of Commerce and Industries, Delhi
Break of the dawn in Indian Education financing
HDFC Credila thrives as the name synonymous with success; echoing the industry best practices and the key values of honesty and reliability. The enormous student community in India has embraced it as the most trusted and an esteemed brand. The powerful leadership steering the dignified efforts of the team has been successful in instilling confidence in more and more people to opt in for an education loan rather than the self-finance option. The company has so far funded more than 41,000 students studying in more than 2500 unique Institutes across 35 different countries. HDFC Credila’s cumulative disbursement figure grabs eyeballs going beyond Rs. 5,800 crores. The company today stands at the forefront of thought leadership towards reinventing this educationloan industry with innovation and a dynamic corporate culture.
The novel idea behind the inception of HDFC Credila sprung from realizing the lack of specialized and dedicated education financing services provider in India. While attending an event at Florida, Ajay got to know more about the Student Loan segment, which has been the second largest asset classin the USAcarrying over $ 1.3 Trillion total student loans outstanding. In India, where education is the key to economic development, total Education Loan portfolio outstanding reached $10 Billion only putting all lenders together. “This unfathomable gap inflamed our desire to venture in this space. We went to a number of authorities, ministry, and creditating agencies; nobody had any data on this asset class. We did a lot of research for valuable insights. The deeper our commitment got with this project; the more we realized that there needs to be a structured methodical process with an approach to education loan space in India” shares Mr. Bohora speaking about ideation of the company.
HDFC Credila traces its humble beginnings in 2006 when the Indian education financing landscape was monopolized by Public sector players. With Indian economy gearing up for a phase of rapid development, there was a dire need to spark growth in this space considering the immense significance education holds in the progress of a nation.“For majority of the Indian families,quality education becomes the first and sometimes the only priority; it is the purpose of our lives. It needs no mention that applying for education overseas corresponds to knocking on the best opportunities. Given that background, the massive gulf between demand and supply in the education loan has always pervaded the Indian education system as a critical challenge. With the rising cost of higher education, the parents find it extremely difficult to fund the cost of higher education of their children. The requirement of funds has been primarily met by self-funding – liquidating assets like mutual funds, shares, second homes, etc.; loans from friends and relatives; procuring finance in form of personal loans or loan against property and gold, etc. usually at higher rates and without tax benefits. In many cases, the financial situation doesn’t support self-funding which eventually results in compromising with the quality of education or prevents from receiving further education. This huge gap could only be filled by specialized education loans”, expounds Mr. Bohora informing us about the idea that sparked the journey.
Trailblazing the entry of private sector in this space, the company’s journey began with the founders’ profound mission to transform lives through education and contribute towards nation building. The founders intended to develop insights based onindustry data to gauge the scope for development in this space and identify the major gaps that plagued this segment. A huge database was createdcovering 100,000 courses which was soon followed by the phase of product development and decking out the product with a robust loan processing system. Soon, the search began for investors with an aspiration to become an entity like what HDFC is for Housing Loans.The groundbreaking conceptheld tremendous potential; that too being unprecedentedinvoked substantial interest of leading investors and industry domain experts.Credila got the opportunity to draw the initial investment fromDSP Merrill Lynch – one of the leadersinglobal wealth management, capital market and advisory services in India as a minority investor with 40% stake in December 2007. However, Credila’s journey witnessed respite for some time as Merrill Lynch was acquired by Bank of America and had to pull out of its principal investment from the lending organizations. The search started all over again and this time Credila proceeded with the offer from Housing Development Finance Corporation Limited (HDFC Ltd.) who acquired Merrill Lynch’s 40% stake in December 2009. The event marked the onset of Credila’s journey as an esteemed brand. At present, HDFC holds approximately 81.53% of the shareholding and the remaining equity share capital continues to be held by the founders. Besides, HDFC Credila has issued compulsorily convertible preference shares to HDFC Ltd. The company depends on multiple sources for borrowing that typically include Secured Non-Convertible Debentures, Commercial Paper, Perpetual & Subordinated Debt (forming part of Tier I & II Capital), Bank Term Loans, Overdraft facilities, Inter corporate Deposits etc. At present, HDFC Credila secures AAA rating for some of the long term debt and A1+ for short term debt from renowned credit-rating agencies in India.
Mantra for Brand eminence
During a conversation with The CEO Magazine, Ajay Bohora – Cofounder & Chief executive officer at HDFC Credila speaks about the success mantra that guides the team, “HDFC Credila gathers a deep understanding of the needs of the students and their parents through the research and engagement programs conducted on a continuous basis. We engage with our target audience, all through their education life-cycle by hand-holding and guiding them and making finance available to the eligible students, while they tread on their journey towards their dream education.” Following this mantra towards achieving performance excellence has translated into giant leaps that HDFC Credila has taken towards revamping the mode and scale of engagement with the target audience. The company spearheaded popular educational events on Facebook Live and conducts many educational events on other social media platforms too.Acting as a multi-dimensional platform, the company helps students to gain expert guidance on career from educationists and specialist across the globe in addition to the education finance related guidance. The out of the box initiative, CredilaOneStop took shape keeping in concern the motive of delivering maximum value to the customer. It aims to empower the applicants by fetching the best of offers from the top Indian & international brands.
The HDFC Credila Excellence
The promoters of the company – Mr. Ajay Bohora and Mr. Anil Bohora were aware of the fact that as a player keying specially on this sector would require keeping pace with the dynamic and highly nuanced education industry. The varying needs of the market demanded specialized solutions. The teamenvisioned creating flexible product range that would align with customers’ needs; offer them value additions and would be delivered to them ensuring convenient customer experience. The thought gave birth to an avant garde concept –‘customized education loans, home delivered!’ For this sui generis approach, HDFC Credila has successfully marked its presence as the ‘specialist’ in educational loan segment. The company consolidates its viable leadership having carved a niche for itself by introducing unique solutions that encompass a host of benefits for the students’ availing educational loansfor studies in India and overseas.HDFCCredila has redefined the tenets of this industry instituting the key values of customer centricity, transparency and reliability. Besides spearheading specialized education loan services, HDFC Credila’s grand portfolio has many firsts in its bag.Here’s a glimpse of the key factors that demonstrate HDFC Credila’s supremacy:
- Co-creating products with the eco-system – Team HDFC Credila focuses on adding value to the entire education life cycle of a student. Hence, fending off ‘one size fits all approach’, it believes in co-creating a flexible product with the customer; where in the process completely takes the customer’s pain points into consideration. The customization achieved has to be compliant with the regulatory framework; however, the team utilizes the best of its ability towards offering utmost advantage to the customer.
- Customized Education Loans Home Delivered! –Apart from co-creating products with the clients, HDFC Credila offers them customers the convenience of ‘an education loan Home – Delivered’! The company offers door step services for its entire loan process to all its customers. The company’s representatives also make multiple visits whenever needed so that the process is completed in time and in order. This truly is unique when others expect almost all their customers to visit branches multiple times.
- Flexible repayment terms –The uncertainty associated with repayment of the loan amount has always been one of the major obstacles that discourages the customer towards opting for education loans. As this landscape is dominated by public sector entities, there are very rigid and strict norms for loan repayment. HDFC Credila sets its foot in this space as a reformer offering flexible repayment options wherein the customer can pay full or partial interest during the course of their studies.
- 100% loan on educational expenses with no margin money required– HDFC Credila’s transformative practices for the industry cover a host of advantagesfor its customers. The foremost benefit is that they get to availfunding for 100% of the cost of education including the living expenses. The company fundsthe whole tuition fees without charging any marginmoney. Adding more to the benefitsHDFC Credila brings would include: relaxation to the customers from availing the entire loan amount; the interest is charged only on the amount which is disbursed; that too, only when it’s actually disbursed. Also, the facility of longer repayment tenures is offered to make the payback comfortable. Moreover, the company provides loans even before the admission is granted to a student.
- Tax Benefits –HDFC Credila’s concept of value addition also includes tax benefits to the customer. The company enforces brand eminence offering tax benefits on the interest paid on the loan.
- Mobile enabled billing & servicing–Leveraging digital transformation to its best, HDFC Credilaenhances customer experience by providing the customers online access to their accounts. This allows them to view their installments paid till date, paid interest, balance amount etc. instantly evading the need to visit the branch for the same.
- Mater Brand Award in 2012
- Business Leadership Award in 2013
- Worldwide Achievers Award in 2015
- DNA Award in 2016
- Confederation of Education Excellence Award in 2016
- India’s Most Trusted Brand Award in 2016
- Asia’s Most Trusted Brand Award in 2017
- India’s No. 1 Brand Award in 2017
In a conversation with our editor Dr. Pallavi Banerjee, Mr. Bohora unveils his thoughts on his leadership and entrepreneurial journey and speaks on some of the key issues concerning his company. Here are the excerpts….
TCM: What do you hope to accomplish within the next year from the professional point of view? What is your vision as the chief driving the helm of HDFC Credila?
Ajay Bohora: Professionally, HDFC Credila looks forward to crossing US $ 1 Billion mark in the total disbursed amount of education loans by the Company within the next year. At the personal front, I wish to ensure we can contribute towards the noble task of nation building by empowering as many students as possible within our framework by funding their higher education.
After having gone through such an exciting journey, what really drives is to create a legacy for the team and the industry. We started with a vision of pioneering the private educational loan space and shape it with industry best practices. That journey is still on. We want to make sure that we have successfully created an institution that will motivate many other players to venture in this space and bring along innovative ideas with them towards evolving and maturing the industry to the size it deserves. We find it our responsibility to create a sustainable business model out of HDFC Credila where more students can get education loans for their higher education in India & abroad.
TCM: As Credila sits at the top of the ladder hitting supreme success, it needs no mention that your entrepreneurial journey must have been rewarding. How do you feel about it?
Ajay Bohora: My entrepreneurial journey with Credila (now HDFC Credila) has been the best part of my life. As an entrepreneur, I was always driven by the zest to do my best with what I have; to achieve more. Our first entrepreneurial venture, which was in the BPO,has been very fulfilling in the true sense of terms. Without any background in the industry, it turned out to be extremely challenging to rope in a joint venture partner when we had no capital to invest; and no trust factor to support us. However, my entrepreneurial passion drove me to keep making efforts and patiently wait for the result. We made thousands of literal cold calls. It still feels like a dream come true when our devotion to the cause finally fetched us a joint venture partner from Iowa, USA securing 51% equity. Our journey with HDFC Credila, since its very beginning, presented before us a set of critical challenges. We were again venturing in a space in which we had no background. Moreover, we needed to find a strategic partner. The biggest challenge was to pioneer private education loan industry in India especially when margins in this business are not attractive for a new player offering only these products. The challenges tried to bore me down as I could not picture my success after my persistent efforts which entailed a number of visits to the USA. However, my unswerving focus on what we envisioned coupled by my deep conviction towards achieving what we dreamed of kept me going. Winding up with Merrill Lynch of New York and Indian financial power house – HDFC for strategic investment, we did hit the key milestones in this journey. We could reach where we have reached today only because of our uncompromised adherence to the key values of sincerity and honesty of passion.
TCM: Kindly spare three pieces of advice for the entrepreneurs who are just starting out.
Ajay Bohora: My advice would be –
- It’s important to really understand what your passion is, what drives you, what do you enjoy doing and then find the work/occupation/profession which is in sync with those.
- The pace of change in today’s world is mind boggling. It’s extremely critical to learn, unlearn and relearn every day.
- Life is a story; let yours be the best selling!