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Finance company Capital India has invested $25 million via equity and debt in education loans platform Credenc.

Delhi-based Credenc will use the funds from Capital India to build a loan book of Rs 3,000 crore by 2025, and enable more education loans. The founders of the startup, Avinash Kumar and Mayank Batheja, will continue to run the operations for Credenc, as per the deal, Capital India said.

“The annual spend on college fees in India is around $50 billion or Rs 3.5+ lakh crore, of which only five percent is financed by organised lenders. With Credenc, Capital India Finance Ltd (CIFL) intends to change the segment perception and reduce underwriting risk basis Credenc’s future employability score, which will help this percentage go up to at least 15 percent, aiming to lend Rs 3,000 crores by 2025,” SK Narvar, promoter of Capital India said in a press statement.

Founded in 2017, Credenc offers education loans covering K-12 school fee, online upskilling courses, education abroad, as well as higher education. The startup is looking to launch a student-focused neobank soon.

Credenc differentiates itself by offering intelligent loans that track 15 million data points to predict the future income of students applying for loans, providing financial assistance based on a student’s potential and future income instead of his or her existing capability.

“Our partnership with Capital India is very strategic — it will give us both balance sheet and cost of capital advantage, which will help in disrupting the education lending segment by providing loans to students who were until now ignored, helping lakhs of Indian students achieve their potential,” Avinash Kumar, Co-founder of Credenc.

Capital India Finance Ltd is an SME finance and affordable housing finance company that helps SMEs and MSMEs access capital via loans. It also offers micro ATM and domestic remittance services, among others, via its fintech unit called RapiPay.