Non-performing Assetsin Buyers'and Lenders'Perspective in Educational Loans

Abstract

Educated population is a boon to a country and uneducated mass is a serious threat. With the scarcity of resources at central level, private institutions have special access to the untapped domain of higher education. Privatized model of education represents efficiency having its own limitations of increased cost due to non-availability of Government Subsidy. Hence, there is a strong need for easy access to educational loans for the deserving and needy students. Credit Management has gained significance due to inflating book size of non-performing assets. NPA has affected banks in terms of their liquidity, solvency and profitability. Narasimham Committee has suggested for bringing more transparency in Banks’ financial reporting by introducing Asset Classification, Income Recognition and Provisioning, based on asset quality. This Paper highlights the issues involved in NPA formation and its management especially in educational sector from both borrowers’ and lenders’ perspectives. The data utilized was collected from one hundred and eighty respondents through a questionnaire. The data was analyzed and interpreted by using Factor Analysis and Perceptual Mapping techniques to figure out the perceptions towards the causes, responsible for NPA formation and also the preferred remedies, used by bankers to prevent the same.