//gaurav jain

State of Education loans in India

09 Dec
Pinterest
Education loans

Education loans in India

The NPA levels of the education loans in India is bound to increase in the coming few years. The crisil research expects the NPA levels to reach to 6-7 % by 2015-16 from the present levels of 4%. This is a serious situation especially for the public sector banks of the India as they provide almost 90% of all the education loans taken by students.

 

 

Loan distribution profile 

Almost 85 % of the loans are given for higher education, 10% graduation courses and 5% for other courses.

Demand of education loans

India has the highest number of education institutions in the world. Still only 3% of Indian students avail the facility of education loan against the UK (85%), US (77%),  German (70%) and France (70%). It is expected that education loans will grow at the CAGR of 20% from 2011-2015 as compared to 40% in 2004-10. The reason for slow growth can be attributed to 2 factors:

1. Larger base effect

2. Rising NPA levels in education loans

 

Reasons for high NPA

1. The main reason for such high level of NPA is the rule of no guarantee or collateral for loans under Rs. 4 Lakhs. Almost 80% of loan defaults come from this category.

2. Lack of the ability to correctly predict the salaries that students will be getting after completing their studies.

3. False promises by many private institutes about the average expected salary that one can get from their college placement cells.

4. Students who had taken loans in the period of recession 2008-9 may be finding difficult to may back the loans due to lack of job security or other reasons.

 

Way forward

Mandatory collateral: The banks should be allowed to have collateral even for loans below Rs 4 lakhs. This will really help the banks to reduce their NPA levels. It will also help to motivate the private sector banks to enter into this segment.

Grading of colleges: The colleges should be  graded with respect to the efficiency and repayment track record of the students of that college.

Increase in the repayment period: This will be a relief to students who currently have low salaries and cannot pay big amounts.

 

Gaurav Jain

 

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Some random college pics

07 Dec
Pinterest

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Stock options simplified

19 Sep
Pinterest

Stock optionAccording to book definition Stock option is:

A privilege, sold by one party to another, that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon price within a certain period or on a specific date.

I found quite a simplified article on stock options written from the perspective of a layman.

Preview -

The price the company sets on the stock (called the grant or strike price) is discounted and is usually the market price of the stock at the time the employee is given the options. Since those options cannot be exercised for some time, the hope is that the price of the shares will go up so that selling them later at a higher market price will yield a profit. You can see, then, that unless the company goes out of business or doesn’t perform well, offering stock options is a good way to motivate workers to accept jobs and stay on. Those stock options promise potential cash or stock in addition to salary.

Read more here

Gaurav Jain

 

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MBA Trimester 1 Lessons!

11 Sep
Pinterest

Here are some of the lessons that I thought will be worth sharing.

1. Revise Daily – Well this advice is being given to us since our childhood but after entering the crazy life of MBA this becomes a essential thing to do. Whatever happens in class, just revise it once each day everyday.

2. Party! but don’t go crazy – Well it is essential , yes mind it – essential to party in the start of our MBA life to make friends, socialize. Partying becomes even more important when you have a large batch size in your college. But always remember that partying should never  get in conflict with lesson 1. This way you will be having less of guilt feeling after you wake up in the morning next day!

3. Just don’ read it – Analyse it : In MBA you will be having loads of pre read case study discussion. Make sure you not only read the case study in advance but also analyse it and make some important points. Otherwise you will only end up doing DCP.

4.  Start Early – make notes from the books :  Don’t wait till exam time, just start reading books or make notes as soon as the session starts. Even if you are able to have a quick read, it will really help you in exams. And if you are one of people who like to read using his own notes then, start preparing it well before the exams. While making notes, just start writing without actually trying to memorize them. The reason i say this is because one tends to slow down when memorizing, and hence loose the momentum which results in leaving the activity of making notes.

5. Managing distractions : In MBA you will be faced with lot of distractions : various emails, FB updates, Competitions, etc. Now handling it is one of the most challenging task at MBA and the one who is able to do it comes out with flying colors. My advise will be that whenever you study, just write down the things that you will be concentrating on in next 1 hours (make short targets). This will help you to re-focus even if some distractions comes.

6. Managing Emails : In MBA you will be daily bombarded with loads of emails from plethora of cells. Handling these emails are a tough task. But these is a simple solution to it. Whenever you read an email, try to take action on it there itself. If you are studying, try not to pick up your phone whenever an email comes instantly. Stick to you schedule targets of one or half hour and then read the emails. Also, reading emails and then marking it unread will not help! Try to use filters, labels to segregate important emails.

 

Gaurav Jain
Freeze Dried Meat

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Welcome!

15 Aug
Pinterest

Welcome to my blog!

photo by: Rameshng

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Gaurav Jain

If you can dream it, you can do it.