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Synopsis

• As of December 31, 2022, Indian students comprise 39.5% 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 Non-Banking Financial Companies (NBFCs), with the United States being the only country ahead. The exposure to the Canadian market has witnessed a robust compounded annual growth rate of 77.5% from March 31, 2021, to June 30, 2023.

• 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% of their total AUM as of June 30, 2023.

• In the recent past, there has been escalating diplomatic tensions between India and Canada. This has resulted in India taking certain measures including suspending visa services for Canadian nationals. Given that Indian students account for 40% of international student enrolments 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.

• CARE Ratings anticipates that the growth momentum for these NBFCs will persist, as students are more likely to seek alternative destinations for their education rather than postpone their academic pursuits.

Canada is the Second Largest Destination among Indian Students for Overseas Education.

Fuelled by the strong demand for overseas education among Indian students, specialised NBFCs have effectively established a niche in the overseas education loan segment. Among the preferred destinations for Indian students, countries such as the USA, Canada, the UK, Australia, and New Zealand stand out prominently. This preference is evident in the growing number of visa issuances to Indian students seeking to study in these countries.

Currently, Canada stands as the second-largest market in terms of regional exposure for education loans among specialised education loan NBFCs, second only to the USA. The impetus for this growth is primarily attributed to the robust demand for education in Canada, which is further substantiated by the increasing number of student visa issuances to Indian students. The trend of Canada's student visa issuances to Indian students has been on the rise since 2015. Visa issuances to Indian students constituted 39.9% of the total student visa issuances to international students for CY2023 (till August 31, 2023)

Trend in Student Visa Issuances by Canada to Indian Students