Affordable Education Loans for Students

Girl students
Affordable Education Loans for Students
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Education Infrastructure
Business Model Description

Deliver financial assistance through B2C models engaged in offering lending solutions to students for both formal and informal education.

> Loans are provided for 100% of total tuition/study costs across education levels/courses, for a maximum tenor of 24 months, with a nominal value of 3-300 mn and flat interest rates of 0%-1.5% per month. > Approval process (including the time for disbursement of loan to the campus account) takes 1-3 days. (14) Examples of some companies active in this space are:

Pintek, founded in 2018, provides access to funds for students and parents for study fees; starting fees, semester fees, tuition or tuition fees, and course fees., and educational institutions in developing facilities, procuring books, and props. In 2021, it raised USD 7 mn in Series A round from Socap Holding Pte. Ltd, bringing the total capital raised to more than USD 35 mn. (15)

PT Inclusive Finance Group (Danacita), founded in 2017, is a technology company that owns and operates a platform, engaged in providing affordable education financing for students and professionals. In February 2021, it raised USD 5 mn in Series A from Monk’s Hill Ventures and Qualgro. (16)

Expected Impact

Provision of accessible quality education to enhace quality of education and learning experience, and improve the quality of future workforce

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
Market is at a nascent stage and no exits have been observed so far.
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
5% - 10% (CAGR)
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
USD 500,000 - USD 1 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Quality Education (SDG 4)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Reduced Inequalities (SDG 10) Gender Equality (SDG 5) Decent Work and Economic Growth (SDG 8)
Sector Sources
  • (1) World Bank. 2020. The Promise of Education in Indonesia. (2) Republic of Indonesia. 2020. Indonesia's 2020-2024 National Medium-Term Development Plan (3) World Economic Forum. 2017. The Global Human Capital Report 2017. (4) Republic of Indonesia. 2019. Roadmap of SDGs Indonesia Towards 2030. (5) MoEC. 2020. The 2020-2024 MOEC Strategic Plans. (6) Kementerian Pendidikan dan Kebudayaan. 2021. Dashboard GTK. (7) BPS. 2021. Rough Participation Rate (APK) of Senior High School by Revenue Group 2019-2021. (8) Republic of Indonesia. 2021. APBN 2021. (9) The Ravenry. 2020. i360 Report Edutech Industry in Indonesia. (10) Ministry of Education and Culture. 2020. MoEC Regulation No.2 of 2020. (11) SEKRETARIAT NASIONAL SDGS. 2019. Indonesia's SDG National Action Plans-RAN SDGs 2021-2024. (12) OJK. 2019. FAQ Fintech Lending. (13) Ministry of Women Empowerment and Child Protection. 2020. Profil Perempuan Indonesia 2020.
IOA Sources
  • (14) Pintek. 2022. Jawaban Aspirasi Pendidikan - Simulasi Pinjaman. (15) Accion. 2021. Pintek Raises $7m Series A to grow its Education Fintech Ecosystem in Indonesia. (16) Catherine Shu. 2021. ErudiFi raises $5 million Series A to give students in Southeast Asia more education financing options. (17) Forbes. 2021. Indonesian Edtech Startup Cakap Raises $10 Million From Centauri Fund, Singapore’s Heritas Capital. (18) Ken Research. 2021. Indonesia Online Loan and Insurance Industry Outlook to 2024 - Changing Landscape of Financial Products Distribution in Indonesia: Ken Research. (19) MicroCapital. 2020. MICROCAPITAL BRIEF: Accion Venture Lab Takes Equity Stake in Pintek of Indonesia, Provider of Online Loans to Students, Schools. (20) Khamila Mulia. 2020. Pintek bets on Indonesia’s growing online education loan market. (21) Yunnie Marzuki. 2018. Need a tertiary education loan? Call Dana Cita. (22) Accion. 2020. Scaling up amid COVID-19 outbreak, Pintek closes additional investment led by Finch Capital. (23) Ruangguru. 2021. Indonesia’s largest tech-enabled provider for quality teaching & content. (24) Republic of Indonesia. 2021. Annexes Indonesia’s Voluntary National Review . (25) SMERU. 2018. Financing Higher Education in Indonesia: Assessing the Feasibility of an Income-Contingent Loan System. (26) UNICEF and UNESCO. 2021. Indonesia Case Study Situation Analysis on the Effects of and Responses to COVID-19 on the Education Sector in Asia. (27) AVPN. 2022. Dana Cita Student Loans. (28) BPS. 2020. PERATURAN BADAN PUSAT STATISTIK NOMOR 2 TAHUN 2020 TENTANG KLASIFIKASI BAKU LAPANGAN USAHA INDONESIA. (29) Bank Indonesia. 2017. Peraturan Bank Indonesia Nomor 19/12/PBI/2017 Tahun 2017. Ministry of Finance. 2019. Fintech Peer-to-Peer (P2P) Lending dan Potensi Pemajakannya. (30) Ministry of Finance. 2019. Fintech Peer-to-Peer (P2P) Lending dan Potensi Pemajakannya.