Chennai, Oct 16 (IANS): The diplomatic tension between India and Canada will not impact the non-banking finance companies (NBFC) focused on education loans, said credit rating agency CARE Ratings.

On the other hand, the rating agency expects the sector to continue to grow as students are more likely to seek alternative destinations for their education rather than postpone their academic pursuits.

“The Assets Under Management (AUM) of retail education loans provided by CARE Ratings-rated specialised education loan NBFCs to students pursuing education in Canada exhibited significant growth, escalating from Rs 1,426 crore as of March 31, 2021, to Rs 5,183 crore as of June 30, 2023, constituting 19.8 per cent of their total AUM as of June 30, 2023,” CARE Ratings said in a report.

According to the report, as of December 31, 2022, Indian students comprise 39.5 per cent of the total international student population in Canada. Notably, in terms of geography, Canada is the second-largest retail education loan portfolio outstanding for specialised education loan NBFCs, with the US being the only country ahead.

Given that Indian students account for 40 per cent of international student enrollments in Canada and contribute approximately CAD 10 billion annually to the Canadian education sector, CARE Ratings does not foresee any adverse actions that would significantly impact this segment, the report notes.