NIIT offers student loan scheme

1 Author : February 23, 2001 0

NEW DELHI: Indian computer education firm NIIT Ltd., said on Thursday that it
had tied up with Citibank and International Finance Corp (IFC) for providing
loans to NIIT students.

NIIT, India’s largest computer education firm with interests in software
development, said in a statement that Citibank with this venture would target
loans worth Rs 4 billion in five years. IFC, the private sector funding arm of
the World Bank, will be providing the loss coverage guarantee in case of payment
defaults.

"It (loan) will be offered to students of pursuing the i-GNIIT program
at NIIT. The loan program covers the cost involved towards tuition, a multimedia
personal computer and Internet connection," it said. NIIT’s i-GNIIT course
specifically targets full-time undergraduate students enabling them to acquaint
with the latest developments in Information Technology.

The loan will be for a seven-year period and will cover 90 per cent of the
three-year course. During the study period, students are required to repay only
60 per cent of the interest, while the remaining interest and principal can be
repaid in the next four years, the statement added.

The scheme, which is being implemented for the first time in the country,
aims at making computer education commercially viable without the help of
government subsidies. Higher education in India’s government-run colleges is
heavily subsidized and commercial banks typically offer student loans only for
select institutions and overseas education.

"In the past, financial institutions have been weary of investing in
educating a student as it was often viewed as the primary responsibility of the
state. This apart, it was perceived as a loss-making proposition," the
statement quoted Citibank’s advisory board chairman Gurcharan Das, as saying.