The Indian neobank Finwego is aiming to be the pioneers in the bank built for the education sector in the country. The Harvard incubated Finwego founders Shiv Vadivelalagan and Pavee Ramanisankar founded it in 2018 and is based in Chennai. The platform’s main focus is on private schools.
It provides secured loans ranging from ₹10 lakh to ₹25 lakh to finance new infrastructural projects like classrooms, labs, or other facilities. The neobank offers a loan of up to $7,000 to individuals and $34,000 for institutions. Finwego also provides financial support to vendors and suppliers who supply education material like the uniform, notebooks, and others. Following a bill discounting model, Finwago provides loans against billables.
The funds of Finwago are secured by a bank and non-bank partners holding Reserve Bank of India (RBI) licenses. Finwego never disclosed the name of its partners on its website. The neobank has raised a total amount of $1.7 million in funding since June 2019 seed round led by Elevation Capital. Neither Vadivelalagan nor his wife Pavee Ramanisankar has experience in the banking sector. Vadivelalagan worked as a global engagement manager at consultancy Glenbrook Partners for two years, before establishing the neobank.
Before starting as an entrepreneur he worked as a consultant in the United Nations and Dalberg. He founded the cross-border remittance company in 2013. The earlier experience of Ramanisankar in the education sector is, having founded a book publishing firm, IllusTrated, and served as CEO of a K-12 school, Akshara Vidyaashram, between 2010 and 2015. The founders are confident enough that the startup will be able to break even by 2020. Now the startup is on track to close a loan book size of ₹ 20 Cr and making revenues upward of ₹ 1 Cr by the end of this fiscal.
The challenger claims to work with more than 700 institutional partners. In the last decade, Pavee Ramanisankar realized that one basic problem that schools in India faced is procuring working capital. This understanding came from her pain when she needed growth capital for her school. Banks and lending institutions in India continued to be anxious about providing capital to schools, which are running by a trust or non-profit organization. Finwego’s aim to deliver customized lending products for the rapidly growing private school education space in India, CEO Shiv Vadivelalagna has mentioned once.
