Financial Institution FAQ's
Find answers for your queries related to Brainybatch.
There are 3 Brainybatch EduEMI Products:
- Short-Term EduEMI for School/Colleges: After Final Approval of the EduEMI application, the Financial Institution will transfer the Approved Loan amount in one-shot to Brainybatch Nodal Account and thereafter Brainybatch will deduct a service fee from the received amount and transfer the agreed upon amount to the Educational Institution bank account. For more details check www.brainybatch.com/nocostemi/flow
- Long-Term EduEMI for Colleges/Universities: Brainybatch will onboard the Parent/Student with all their details and share the entire details via technology to the financial Institution. After Final Approval of the EduEMI application, the Financial Institution will transfer the required amount directly to educational institution account. Financial Institution will transfer 1.5% of the total loan amount approved to the Brainybatch current account as affiliate commission.
- Business/Infra EduEMI for Educational Institutions: Brainybatch will onboard the Educational Institution with all their details and share the entire details via technology to the financial Institution. After Final Approval of the EduEMI application, the Financial Institution will transfer the total loan amount to the educational institutions bank account. Financial Institution will transfer 1.5% of the total loan amount approved to the Brainybatch current account as affiliate commission.
After the Short-Term EMI or Loan amount has been disbursed from Financial Institution to Brainybatch Nodal Account, within next 24 to 48 hours, Brainybatch will deduct a service fee from the received amount and transfer the agreed upon amount to the Educational Institution bank account. For more details check www.brainybatch.com/nocostemi/flow
On the repayment from the parent, an auto-debit/ECS will be configured by Financial Institution with the parent, after the parent has signed off to pay the EduEMIs via ECS which will be deducted every 2nd from the next month onwards or based on salary credit date (whichever is early).
In case of Long-Term EduEMI and Infra EduEMI, the loan amount is directly transferred into the educational institutions account. Hence, there is no money lying in the account.
There are 2 structures for Short-Term EMI which needs to be implemented in 2 phases:
Phase 1: One-shot payment from the Financial Institution to Brainybatch Nodal account and from Brainybatch Nodal account to the Educational Institution
Phase 2: For Short-Term EMI, there could be possibly 3 trenches that gets delivered (on April/Sept/Jan) but this will be a rare case. We wouldn't want you to spend time at this point in time.
For Long-Term & InfraEMI, it's completely dependent on the end-consumer, how they would want the money to be disbursed. Brainybatch plays no role.
For Short-Term EMI, Brainybatch offers Financial Institution ~12% to ~13 IRR, which is equated as:
- 1.97% for 3 Months when equated upfront
- 3.41% for 6 Months when equated upfront
- 5.21% for 9 Months when equated upfront
Here is the working of the sheet published at www.brainybatch.com/eduemi/IRR
(Note: an excel sheet is shared in the email)
In Short-Term EduEMI, Brainybatch ensures that the Educational Institution is liable to hold the issuance of Educational Certificates such as NOC, School Leaving certificate and marksheets until the all the EMIs are paid by the customer and Brainybatch receives a NOC from the Financial Institution which in-turn is shared with Educational Institution for them to issue the certificates. This binds parents to repay the Loan amount in-order to receive their respective child(ren)'s certificates from their respective Educational Institutions.
For more details check www.brainybatch.com/nocostemi/flow
In Long-Term EduEMI & Infra EduEMI, Brainybatch is not liable for any NPAs and it's sole discretion of Financial Institution to evaluate the parent/student before issuing the loan.
Considering we as Brainybatch are an EduEMI aggregation platform, we do not have a model of FDLG to our financial institutions or lenders. However, for Short-Term EduEMI we have one of the model where we pass on the back-to-back guarantee provided by Educational Institution to you as Lender/Financial Institutions, if educational institutions agree to be a guarantor for their respective students/parents.
Here are 2 models for Short-Term EduEMI:
- Back-to-back guarantee: In this, we convince the educational institutions with an intent to provide higher approval rate. Hence, it's important that we as aggregator should be sharing a high approval rate for the institution. In return we will be entitled to hold 10% of the total amount disbursed by Financial Institution in our Nodal Account as a Security in case the parent defaults in repayments.
- No guarantee model, where there is no guarantee from Educational Institution, none of the above is applicable. Financial Institution uses it's own discretion to approve a case. The chances of default in this segment is usually low, considering the educational will support
For Long-Term & Infra EduEMI, we have no guarantee model. It's sole discretion of Financial Institution to evaluate the parent/student before issuing the loan.
For Short-Term EduEMI, our Rule Engine can define score card based lending for Financial Institution's lending policy. It depends on the variables that Financial Institution wants Brainybatch to capture and policies Financial Institutions wants to compute. After Financial Institutions share the variables to capture and the policy, it would take less than 2 weeks for Brainybatch to go LIVE in the first phase.
Yes, Brainybatch is open for Financial Institution score card integrations. Please share details and Brainybatch will implement after the requirements are clear.
Yes, Brainybatch can definitely explore the feasibility of hybrid scorecard as long as the school interactions are owned by Brainybatch.
- Institutional Driven Customers: Upper Middle Class/ Middle Class Parents/Students with monthly income of parents ~Rs.40.000 or more, who come to our platform because we have tied up with the educational institution and they have been recommended by the educational institution.
- Retail Customers: Upper Middle Class/ Middle Class Parents/Students with monthly income of parents ~Rs.40.000 or more, who discover our platform through google in search for education loans or heard from their friends/family
- Educational Institutions: Who needs business loan for their educational institution operations against their cashflow or property.
Brainybatch being an Online EduEMI (Education Loan) Aggregator only offers a platform for financial Institution (lender) and Parents/Students (lendee) with a seamless integration system between their educational institutions and their financial transactions. It doesn't offer collection service. However, we intimate the customers about their EduEMI dues for Short-Term EduEMIs and make sure the payments are made for the parent to avail the same EduEMI for the next year.
Financial Institution needs to come onboard as Brainybatch EduEMI Financial Institution partner by signing a "Collaboration Agreement" with Brainybatch (contract shared for Short-Term EduEMI) with a franking on a Rs.600/- .
Brainybatch can share the dashboard access to view all the 3 types of EduEMIs that is offered to their customer (Refer #8). Brainybatch can then have a pilot run in Bangalore & Delhi. Financial Institution can have access to the same data via Brainybatch APIs. The latest Brainybatch APIs are published at https://www.api.brainybatch.com/