| | JUNE 202019Q. What do you see as the major challenges faced by the education players?The main challenges faced by educational institutes in India are inadequate infrastructure, unavailabil-ity of quality teachers at the proposed salaries and inability to invest in technology & research. These challenges can be addressed by the private sector through world-class infrastructure and innovative teaching pedagogy ­ which would create sufficient interest among the student-parent community. The fact that private players can run the institu-tions efficiently ensuring sufficient seat occupancy enhances their ability to raise funds through private equity, banks, and NBFCs. These institutes do tend to charge higher fees however education loans are avail-able from banks at reasonable rates. With increased private investment and sops from the government, we should hopefully move towards a day where our institutes will rank among the best in the world.Q. What could be the reasons of loan default by these institutions?The reasons for default generally include inability in managing operations & funds on account of inade-quate student inflows, non-compliances with regu-lations resulting in the cancellation of licenses and heavy capitalization. Lenders find it challenging to predict the cash flows and assess the impact of exter-nal factors on education institutions. PSU and Private Banks both have experienced such transactions and some of these NPAs are now being resolved through the ARC route. Owing to this, Banks have strength-ened their lending criteria and reduced exposure to good quality institutions only, while some of the in-stitutions (say engineering colleges) are almost find-ing it impossible to raise funds. THE MAIN CHALLENGES FACED BY EDUCATIONAL INSTITUTES IN INDIA ARE INADEQUATE INFRASTRUCTURE, UNAVAILABILITY OF QUALITY TEACHERS AT THE PROPOSED SALARIES AND INABILITY TO INVEST IN TECHNOLOGY & RESEARCH
< Page 9 | Page 11 >