India's Best Business Schools- Interview (Ajay Bohora)

>Funding Your MBA

Ajay Bohora - Co-Founder and CEO, Credila Financial Services

A popular Chinese proverb goes thus:

“If you are planning for a year, sow rice; if you are planning for a decade, plant trees; if you are planning for a lifetime, educate the person!”

Well, the number of management institutes in India have grown to around 5,500, resulting in the total collective seats of around 5,20,000 as per ASSOCHAM research report. Students and parents have started viewing higher fees as the indicator of better quality, which arguably may or may not be the case! There is an increasing attraction towards the coveted MBA degree, sinceas compared to other degrees, there is relatively shorter pay-back period for their investment in MBA degree. Also, MBA degree has been so prevalent in the employment market that students feel that they will be left out without one! Robert Buzzellonce quipped, "The mark of a true MBA is that he is often wrong but seldom in doubt!"

Before deciding which MBA entrance tests to take, students and parents look at and explore various parameters. Rank and location of the institute are critical, however, in addition to that, parents and students have increasingly started comparing fee structure of the institute before deciding on which entrance test to take. If the fees of certain institutes are too high, students usually downsize their dreams and don’t even appear for their entrance tests. Usually, parents think of the quantum of family savings they have and then make a decision while deciding even about the entrance tests. On a lighter note, parents say, “My son and my life time savings both go to MBA institute!” However, that need not be the case anymore.

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Credila has a pre-approved education loan programme where it can do the file processing well in advance and can tell the students and parents how much of education loan will be available to them even before they start applying or even start appearing for their MBA entrance tests. With loan funding clarity from Credila, students do not have to downsize their dreams.They can confidently pursue their dreams of the best institute available and not compromise on the quality of the thinking about applying to Credila for education loan around the time they start preparing for their MBA entrance tests.

Paying for higher education means paying for knowledge. Knowledge is the asset which has the potential to help generate income. Students have started viewing education loan as the cost to buy knowledge through higher education. Since knowledge as an asset cannot be sold per se, its income generating component is the core reason for students and parents wanting to acquire that asset, which is ‘knowledge’, by paying fees using education loan.

While deciding on education loan, some of the conditions students should pay attention to are as follows:

1.     The amount of education loan the lender is approving

2.     Will it only cover the tuition fees or the entire cost of education, including living expenses

3.     Is there any margin money required (portion of the amount that the students will have to bear)

4.     What is the term/tenure of the loan 

5.     What would be the EMI on the loan (which is dependent on both the interest rate and the term of the loan) 

6.     What is the grace period available after the graduation before the EMI starts, (time available to students to find the job before the EMI starts) 

7.     What is the documentation process and how long will it take for the lender to approve the loan 

8.     Is the lender covered under section 80E of the Income Tax Act for the borrowers to avail the tax benefit 

9.     Does the student need to visit the lender or can they collect the required documents 

10. Will there be online web support during the repayment period 

11. Does the lender understand the education sector to guide the student to avoid wrong decisions,etc.

While pursuing MBA, it’s important for every student to remember that degrees are okay, but in today’s competitive world, beyond the institute and the degree, it is the individual which matters the most. Students should take their learnings beyond the classrooms and not restrict the learning to text book alone. Jim Rohn once said, “Formal education will make you a living, self-education will make you a fortune!”

(As told to Arshad Hippargi)