Banks have begun designing special education loan schemes for women and also for the IIM institutions at lower rates of interest because the perceived risk is lower and the quantum of loan required is larger.

Union Bank of India (UBI) recently introduced an education loan scheme for premier management students where women will pay 50 basis points less than the their male counterparts. The loan scheme will be exclusive for IIM students where male students get loans at 10.5 per cent and female students get 10 per cent.

Total loans under the scheme is Rs 15 lakh and is designed to meet all education expenses, including hostel fees and cost of books.

For students in ISB Hyderabad, the loan amount is higher at Rs 20 lakh. It also covers the student exchange programme. They have an education loan outstanding of Rs 952 crore.

SBI, the largest player in the segment with a portfolio size of Rs 8,455 crore, also has an education loan programme designed for IIMs, where the loan is 50 basis points lower in interest rate for women. The bank is hoping to increase the number of institutions under the SBI scholar loan schemes from 61 to 100 for the next academic year.

“So far, SBI has extended loans of up to 4.18 lakh students with the average loan size being Rs 3.75 lakh. Our portfolio size has grown by 31 per cent over the past year,” said a senior SBI official. The education loan rate varies between 11 and 12.75 per cent.

In fact, some of the banks under the aegis of the Indian Banks’ Association (IBA) last year decided to implement a model education loan scheme formulated by the government to promote education of the girl child.

Bank of India, with a portfolio of Rs 1,700 crore, is also a major player in education loans, but it does not have special schemes for IIM or a concessional rate for women students.

But if women students repay on time, they get a interest rate rebate of 1 per cent.

“But we do give special loans for out-of-pocket expenses for the IIM students to buy laptops. Our regular education loans extend to the IIMs also,” said a senior Bank of India official.