πŸ’° EMIs for school fees

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Non-banking finance companies (NBFCs) and fintechs are raking in the money as parents opt for EMIs to pay the steadily increasing school fees.

Story so far: At the beginning of the pandemic, fintech companies started partnering with schools. Turns out, their exorbitant fees and no space for flexibility in payments made them the perfect place for alternative systems.

  • Generally, these apps set up EMI options for struggling parents with zero percent interest and charge the schools for their service.
  • Unfortunately, some parents have complained that the schools were turning in their data to these companies without informing them first.

How it works: When the schools partner with these companies, they turn over the data of those families that have failed to pay on time. The parents are then approached and they send in their Permanent Account Number (PAN) and other information.

  • This helps the fintechs see if they qualify for an EMI or not based on their CIBIL score and income.
  • The companies then pay that student’s fee in lump sum to the school and the parents can pay those companies back in instalments.

The problem is that this just becomes another way to entrap families into more debt.

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