 "Edu loan provider Credila suspects fraud, sets aside Rs 80 cr provision")
Overseas education loan provider Credila Financial Services, formerly known as HDFC Credila, has uncovered suspected fraud cases in its loan portfolio, the company said in its financial results filing for the quater that ended on September 30, 2024. The company, currently preparing for its initial public offering (IPO), disclosed in its September quarter report that it has set aside a provision of Rs 80 crore to address potential losses linked to these cases.
"We draw your attention to note 9 which describes the ongoing investigation in respect of certain suspected fraud cases in the Company's loan portfolio. Our conclusion is not modified in respect of this matter," Credila said.
Loan fraud investigation underway
The suspected fraud is now under investigation following guidelines outlined in the Master Directions on Fraud Risk Management in Non-Banking Financial Companies, issued on 15 July 2024. These regulations mandate thorough fraud monitoring and reporting processes.
While the investigation examines possible involvement of employees or officers, Credila stated that, based on its evaluation, no further material financial impact is expected at this stage. The lender has refrained from disclosing specific details of the suspected fraud cases.
Background of Credila
Established in 2006, Credila specialises in education loans, having financed over 178,000 Indian students across 4,600 institutes in 63 countries. In June 2023, it was acquired from the HDFC Group by a consortium led by Swedish investment firm EQT and India-based private equity player ChrysCapital for Rs 9,060 crore.
The company's 2023-24 education loan disbursements rose 76 per cent year-on-year to Rs 14,089 crore. Loan repayments, including pre-payments, also increased by 23 per cent to Rs 2,554 crore.
In the September quarter, Credila reported an interest income of Rs 1,067.57 crore, marking a 78 per cent growth from the corresponding period in the previous year.