Fee Financing Model Has a Huge Social Impact Education has a ripple effect on the socio-economic framework where the weak foundation can potentially create a hollow society with no apparent growth stimulators

By Sunit Gajbhiye

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Every nation thrives to improve the index of social development by improving upon the factors that contribute significantly towards socio-economic growth. Human development index is hailed among the most crucial indicators of social progress. Education is one of the most significant and powerful tools of human development. The overall development of the country rides on the quality of education provided to the students. Education has a ripple effect on the socio-economic framework where the weak foundation can potentially create a hollow society with no apparent growth stimulators.

Framing in a simple way, we can say that education helps in developing sufficient numbers of efficient professionals who contribute to the overall development of the society. As a phenomenon, education is both a social foundation and a process occurring in society, therefore, society can be regarded as the objective and education can be considered as the indispensable means of this objective. There has been a major transformation in the education system across the globe, especially in India. Emphasis is laid on providing quality education to all as it not only develops someone personally in terms of income, career advancement, skill development and employment opportunities but it also contributes significantly in social development. The society where quality education is accessible to the foremost of the population tends to be healthier, have higher rates of economic stability, lower crime, and greater equality.

The unprecedented Covid crisis has hit the entire world badly and adversely impacted not only the jobs but also the businesses as well as education leaving a huge social void. This social void is likely to widen if the education sector, which is the core and the most important sector, continues to face the wrath of this pandemic. The crisis for the education sector has deepened as a lot of institutions have been forced to shut their operations due to lack of students as well as funds. Education institutions across the globe are staring at an existential crisis and are facing temporary closure due to the lockdown and lately as a measure to contain the pandemic spread. This has cascaded to a huge dropout. The entire world has put to halt due to Covid induced lockdown which has further forced companies to deduct the salaries of the employees and many even had to lay off as their businesses were impacted. Due to job losses and pay cuts parents were either forced to change the schools of their wards or take them out of the formal education cycle. The increasing dropout rate and decreasing number of schools due to closure has a severe impact on social development which is likely to deteriorate if the education sector continues to suffer such blows.

However, the online education has helped the sector in sustaining the testing times but still it didn't give the desired results as the remotest areas are still to be connected. Apart from this, it is required to provide the infrastructure to a huge section of students as well as schools. Various reports have also suggested that a lot of students are not equipped with the computers, laptops and even smartphones, therefore, making it difficult to impart online education to all the sections. The infrastructure required to develop a blanket digital learning capabilities is huge which is where this can not be a comprehensive solution for the entire industry to resort to.

Education is one such component which has both micro and macro level concerns. At the macro level it defines the direction of how fast and competitive the country can be and at the micro level it is one such head where parents don't want any interruption and they seek every possible measure to ensure the continuity. When things are not going in favor of the entire industry and all the stakeholders including institutions, parents, students, government and corporate are not able to find the pivot points, the movement of education has become challenging. This is not a healthy sign for the society where knowledge takes the top seat. In the times where lack of liquidity breaks the momentum of growth of the sector the new avenues have to be relied upon. All such measures, which not only suggest the direction of the industry but also create social impact, need to be embraced and propagated.

Fee financing comes as a comprehensive solution which creates a win-win situation for both, schools as well as parents. It not only helps the parents in paying the school fee without any extra burden while it also helps the schools in managing the finances. With fee financing we can ensure quality education along with digital education content to provide holistic education even to the most vulnerable class. The resurgence in the Covid-19 cases and closure of the schools in various states, it is evident that the education sector has to face the challenge for quite some time. Since the fee financing companies pay the entire year's fee in advance, the schools get ample funds for the whole academic session while parents get the benefit of zero interest and zero cost EMI. Therefore, this new age financing solution comes as the one-stop solution for schools as well as parents.The fee financing model not only helps in creating a synergy effect while it leaves an overall impact on society as with better education the society will have talented professionals therefore providing skilled employees to the companies which can help them in business growth.

The break in the learning process may mean a large percentage of population may receive inconsistent education which is detrimental for the entire generation and massive unemployment, unskilled workforce, under-competitive society and negative social development may haunt the growth of the entire nation. The social impact which Fee financing has is immense where it ensures the continuous movement and does not sabotage the social fabric. Society finds some wheels to roll through the dynamics of fee financing and more importantly backbone of the economy gets a cushion of support. Fee financing has the potency to drive modern-day education, to enable access of quality education to almost all the students from every corner of the country and to create an equilibrium for all the stakeholders in the education sector which invariably supports the entire economy.

Sunit Gajbhiye

Chief Business Officer, Financepeer

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