With the anticipated annual increase of 10-12% in the cost of education, financing has become a significant obstacle for those seeking a quality education, shared Victor Senapaty, Co-Founder, Propelld in an exclusive interview with Sheeba Chauhan of Elets News Network (ENN). Edited Exceprts:
What motivated you to revolutionise the financing of education back in 2017? Can you share some significant changes or developments you’ve observed in the system since then?
Propelld is a manifestation of our collective passion and unwavering perseverance. Myself along with my childhood friends Bibhu Prasad Das and Brijesh Samantaray, embarked on this remarkable journey driven by a shared vision. Despite holding high-paying jobs that provided comfort, we yearned for a deeper sense of fulfilment through work that made a tangible difference in society. From an early age, we harboured a desire to create something that would positively impact people’s lives and contribute meaningfully to society.
In early 2017, during one of our discussions about driving societal change, we stumbled upon a glaring gap between the current state of education financing in our country and the actual needs of students. It was a pivotal moment that sparked our curiosity and propelled us into months of rigorous research. We delved deep into the education financing industry, meticulously studying existing models and searching for ways to innovate and disrupt the status quo.
After relentless exploration, we finally arrived at an idea that we believed was truly transformative: an underwriting system capable of democratising access to education. We set out to build a financial product that would leverage this unique underwriting approach to assist students who faced daunting financial barriers. Our goal was to ensure fairness, transparency, and accessibility for every aspiring learner.
As we ventured into different education segments, we witnessed the profound impact of our efforts on both students and our esteemed institute partners. With each step, we received validation that our vision was resonating with those who needed it most. Propelld became the platform that skyrocketed towards a future where no deserving student in India would be deprived of quality education due to financial limitations.
The journey has been exhilarating, fueled by our unwavering commitment to empowering students and bridging the financial gap in education. Propelld continues to revolutionise education financing, offering tailored solutions and underwriting policies that cater to the unique needs of students across various disciplines. We remain resolute in our mission, working tirelessly to democratise access to education.
How is Propelld addressing the challenging act of getting financed for students who don’t get financial aid from traditional institutions?
Propelld addresses the challenging act of getting financed for students who don’t receive financial aid from traditional institutions in several ways. We offer various financing solutions, including moratoriums, income share agreements, and study-now-pay-later options. These options cater to educational programs’ different structures and outcomes, allowing students to choose the payment plan that aligns with their convenience and income potential. We have our evaluation based on potential and academic performance instead of solely relying on traditional credit scores and current financial situations. This inclusive approach enables more students to access education financing, irrespective of their credit history or income level. Our streamlined and hassle-free loan process which is entirely digital, simplifies and expedites the application and approval process, making it easier for students to obtain financing.
We collaborate with educational institutions to provide scholarships and other financial solutions. These partnerships are based on trust and we believe that the students who pursue education from these institutes will have future employability enabling them to replay without failure. By partnering with these entities, we further enhance their ability to assist students who may not receive financial aid from traditional institutions. By implementing these strategies, Propelld aims to democratise access to education by removing financial barriers and providing financing options specifically designed for students who may not have access to traditional financial aid.
What are the criteria that Propelld follows for shortlisting its student borrowers?
Our company possesses a distinct underwriting system, which serves as our core strength. This system operates on two levels: individual underwriting and institute-level underwriting. Individual underwriting involves a comprehensive assessment of factors such as credit history, income documentation, and bank statements to determine an individual’s creditworthiness. This evaluation allows us to gauge the financial reliability of the applicant.
In addition to individual underwriting, we conduct institute-level underwriting. This entails an evaluation of the course quality and the reputation of the institute offering the course. By considering these factors, we can provide varying approval levels tailored to each of our partner institutes. By combining both individual and institute-level underwriting, we can offer a differentiated approval process that takes into account the creditworthiness of individuals as well as the quality and outcomes associated with the educational institutions they are affiliated with.
Propelld has a unique business model in the education space. Can you explain how it works and what sets it apart from other players in the industry?
Propelld operates as a B2B2C entity, partnering with educational institutes to provide financial products and enhance their services for learners. Thus, our customer base comprises the institutes and the students/parents. Our domain is relatively unexplored, with no significant players in traditional lending.
The education sector’s unique risk-return tradeoff and opportunity cost may not appeal to traditional lenders, but Propelld recognises the potential of this market. Our deep understanding and experience in this space have convinced us that it holds great promise for a large lender capable of taking calculated risks and being adaptable. As education is the first expense for a student, building a relationship here could provide an excellent starting point for a long-term association.
Our competition primarily consists of upstart startups, both horizontal and vertical players, as we operate in a niche market. Horizontal players view education merely as a sourcing channel, while education-focused vertical players need to gain experience and market dominance. Our sustained leadership position in this segment and the vast market potential leave us with limited competition.
In terms of retaining our institute partners, we continuously strive to improve our product offerings and leverage non-traditional data sources to serve a higher number of learners better. Our close-knit relationship with the institutes enables us to make frequent product modifications, integrate with their systems, and remain their preferred partner.
Regarding students, we plan to transition towards more relationship-based offerings shortly. This will involve assisting students in rating and reviewing courses and educational services, enabling them to make informed decisions and fostering better connections.
How do you see the future of education and learning, and what role do you envision for Propelld in that future?
Education is not only a game changer on a socio-economic level but also an investment with one of the highest returns on investment (ROI). Propelld recognises the transformative power of education in shaping individuals’ lives and society as a whole.
At Propelld, we envision a future of education that is personalised, accessible, and adaptive. We believe every individual has unique learning needs and preferences, and education should cater to those differences.
Furthermore, we anticipate a greater emphasis on skill development and lifelong learning. As industries evolve rapidly and new technologies emerge, the demand for specific skills will continue to change in this evolving job market.
However, with the anticipated annual increase of 10-12 per cent in the cost of education, financing has become a significant obstacle for those seeking a quality education. Adding to the challenge, traditional banking systems have disproportionately favoured premium engineering and medical colleges, leaving countless students from other disciplines and backgrounds at a disadvantage.
Recognising the significance of education and the financial barriers that often hinder individuals from pursuing higher education, Propelld is committed to providing financial support. We understand that the cost of education can be a major deterrent for many individuals, and we aim to bridge that gap. By offering accessible and affordable financing options, we strive to ensure that deserving students have the financial resources they need to pursue their educational aspirations.
