Engineering, medical courses account for close to half of all educational loans in Tamil Nadu

Banks in Tamil Nadu disbursed 24,315 education loans amounting to ₹740.87 crore from April-September 2019, of which nearly 45% were for engineering and medical courses, according to data from the State Level Bankers Committee.

A total of 13,588 loans for engineering and medical courses amounting to ₹335.11 crore, 1,624 loans for studying abroad amounting to ₹168.68 crore and 9,103 loans to others to the tune of ₹237.06 crore were granted, it said.

Educational loans to the tune of ₹64.32 crore were disbursed to SC/ST students, ₹107.40 crore to minority community students and ₹229.93 crore were granted to woman respectively, as per the data.

Out of the total 25,483 loan applications received for ₹812.63 crore, 497 applications for Rs. 40.98 crore were rejected.

Loans to individuals for educational purposes including vocational courses upto ₹10 lakh irrespective of the sanctioned amount are eligible for classification under priority sector, as per Reserve Bank of India norms.

The outstanding amount under educational loans has marginally increased from ₹16,458.40 crore in September 2018 to ₹16,500.84 crore as of September 2019, registering a growth of just 0.26%, according to the data.

The NPA (non-performing asset) in education loans under the priority sector category jumped to ₹3,345.59 crore or 20.28% as of September 2019, when compared to ₹27,86.29 crore or 16.93% as of September 2018, the data showed.

Available data showed that 76% of the loan portfolio in Tamil Nadu is for loans for up to ₹4 lakh.

Experts say the trend of raising NPAs in education loans is witnessed across the country and is a reflection of the tough employment situation.