The US Exim Bank is willing to give education loans to Indian students who want to study in the US, the Chairman and President of the Bank, Mr Fred Hochberg, said today.
Answering a question raised by Dr Sankaran Raghunathan, Dean, The National Management School, in an interactive session organised here by the Indo-American Chamber of Commerce, Mr Hochberg said that the US Exim Bank has been “actively exploring this”. However, he noted that the bank would need to “work with an entity” as it could not give loans to individual students.
Mr Hochberg also immediately assigned an official of the US Exim Bank to pursue the matter with Dr Raghunathan.
Later, in a chat with Business Line, Dr Raghunathan said that there are some 105,000 Indian students in the US, the second highest number after China. He estimates the total annual spending of all the students at $2 billion. A fourth of the students are doing undergraduate programmes, where usually, they have to pay out of their pockets. Availability of Exim loans will help raise the number of undergraduate students from India. Students who borrow from Indian banks pay at least 12 per cent as interest and also have to offer collateral. “If we are able to get the Exim Bank to provide the loans, the interest rate will be as low as 4.5 per cent and not higher than 6 per cent with a longer repayment period,” says Dr Raghunathan. This in turn will enable more people to go to the US for education (instead of other countries) and there will be a beneficial impact on the US economy, he says.
INDIA, A FOCUS COUNTRY
Mr Hochberg said that India was a big market for the US Exim Bank, whose mandate is to support exports out of the US with an objective of creating jobs in the US.
He said that the bank's exposure to India is second only to Mexico (“a country with which we share a 2,000-km border”). But if the current trend of lending continues, India could overtake Mexico in terms of the bank's exposure, he said. The bank has given loans worth $7 billion to India, compared with $8.5 billion to Mexico. “I have not visited any country more than India (as the head of the US Exim Bank),” Mr Hochberg said.
Source: Business Line
