India is one of the world’s largest post-secondary education markets, with over 700 million people below 30 years of age. Despite this, the country has just 1,100 universities, none of which rate in the top 100 of global rankings, and just 6 of which are cited between 100-300.¹

This limits the future earning potential of students and has a broad range of implications for households, as well as for India’s economy. The earnings advantage for tertiary-educated workers compounds over time. While 25-34 year-olds with tertiary education earn 40% more than their peers with upper secondary education, 45-54 year-olds earn 70% more than their peers.² International studies increase a student’s earnings potential even further, with graduates of overseas STEM courses earning at least 5-10x more than domestic graduates, with the power then to change the trajectory of their households for generations.³

The tradition of Indian students seeking higher education abroad, especially postgraduate education, has been a common thread in the success of executives, entrepreneurs and political figures such as Wipro founder Azim Pemji (Stanford), Tata Founder Ratan Tata (Cornell), Airtel founder Suni Mittal (Harvard), and former Prime Minister Rajiv Gandhi (Cambridge). India’s high-achieving diaspora contribute to the US$111 billion in annual remittances (the largest globally), which is re-injected into the domestic economy each year. Greater STEM education opportunities can also help to build domestic industry, supporting growth and innovation in sectors such as manufacturing and services as students contribute to knowledge
absorption, technology upgrading, and capacity building.⁴

Opportunities for overseas study have, to date, been largely out of reach of emerging consumers, due to the significant costs associated with tuition and living expenses abroad. Historically, student loans provided by traditional banks have required a family member to put up their residential property as collateral and undergo a cumbersome approval process, often with high interest rates.

Auxilo provides loans for Indian students to pursue higher education abroad, enabling low- and middle-income consumers to access higher income generation opportunities.

Auxilo’s target customers are students pursuing master’s degrees in STEM courses from top universities in the US, UK, and Canada. To date, the company has helped over 10,000 students across 1,250 universities and educational institutes in over 31 countries. Loans typically cover 100% of the cost of education, including living and ancillary expenses, removing any burden of costs on the student’s parents or family.

Students are provided flexible, interest-only payment plans for the duration of their studies, with principal repayment starting only after graduation, when the student’s earning capacity is enhanced. Previously underserved consumers can access these loans, even with a lack of credit history, lack of collateral, or low co-applicant income. Auxilo ensures that student can repay their obligations, capping the fixed obligation to income ratio (FOIR) at 50% of future student income, based on conservative estimates. To date, up to 40% of borrowers come from low-income backgrounds and 44% of borrowers are new to credit. The impact of these loans is transformative, leading to improved quality of life, better jobs, and health outcomes
that impact a student’s entire household and can last more than a generation.

The company has an innovative, merit-based model of underwriting, which uses a student’s grades and course selection to predict future employability and ability to repay the loan. Loans for STEM courses are a high priority, alongside US-based courses which typically support high employability after graduation.

Auxilo’s rapid growth has been accompanied by rigorous risk management, with the company achieving profitability in its first year of operation and maintaining excellent asset quality for its higher education portfolio. With a focus on digital innovation, the company has the fastest turnaround time in the market, with digitally-enabled collections managed in-house. Auxilo also bundles other value-added products that the customer segment needs such as forex cards and insurance.