The state of Uttar Pradesh is experiencing a notable increase in the disbursement of education loans, indicating a healthy flow of credit in the education sector. During the first nine months of the fiscal year 2023-24 (April to December), there was a significant rise in the number of fresh education loans disbursed, amounting to nearly Rs 1,028 crore. This marks a 30% increase compared to the same period in the previous fiscal year, when more than 28,000 fresh education loans worth Rs 787 crore were disbursed.

Despite the increase in disbursements, the outstanding amount of education loans in Uttar Pradesh witnessed a decline of 4.5% in December 2023 compared to the previous year, totaling Rs 5,642 crore. This decline is attributed to repayments made by existing education loan borrowers, offsetting the increase in fresh disbursements.

Public-sector banks lead in granting education loans in the state, accounting for nearly 80% of fresh advances, surpassing private peers. However, the services sector, including education and housing loans, lags behind in achieving targets compared to agricultural and micro, small, and medium enterprises (MSME) advances.

In recent years, Uttar Pradesh has also witnessed significant growth in the digital economy, leading to an increase in digital transactions. The number of digital transactions in the state nearly tripled from FY22 to FY23, reaching 11.74 billion transactions. This growth in the digital economy has also facilitated increased penetration of financial products such as insurance and shares trading in the state.

According to Sameer Joshi, Chief Agency Officer at Bajaj Allianz Life, Uttar Pradesh is one of the fastest-growing markets for financial products, including insurance, in India. He attributes this growth to major projects driving the state's economy and contributing to growth in various sectors.