How Propelld is Transforming Education Lending in India
Education in India is one of the largest household expenses, often matching the costs of housing and healthcare. Yet, education lending has lagged behind other types of credit, remaining inefficient and risk-averse. This is the challenge that Victor Senapaty, founder of Propelld, aims to tackle.
A Vision Born from Personal Experience
Victor Senapaty grew up in a Tier II city in a family that valued education above all else. His upbringing was steeped in academic excellence, with government jobs seen as the pinnacle of success. Entrepreneurship was not encouraged, yet Senapaty’s father instilled in him a mindset of fearlessness and long-term conviction.
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This background, combined with the educational endeavors of his co-founder Bibhu Prasad Das’s family, laid the emotional groundwork for Propelld. The company was not born out of fintech ambitions but from a deep-rooted connection to education.
Learning from Early Failures
Before Propelld, Senapaty experimented with several ventures between 2014 and 2016, including educational projects and a custom apparel business. These early failures taught him invaluable lessons about resilience and adaptation. “We failed fast and cheap,” he recalls, echoing the wisdom of Paul Graham. This discipline later became a competitive advantage in financial services.
The Breakthrough Insight
The turning point for Propelld came when Senapaty and his team analyzed education financing at a systemic level. They discovered that education loans were being treated like retail products, which was a flawed approach. Instead, they realized education should be viewed as a project.
Propelld’s underwriting process evaluates the viability of the educational project rather than just the borrower. This involves assessing the institution, course quality, student engagement, and historical outcomes. Using AI, Propelld scales this approach by aggregating data across institutions and courses.
Navigating Challenges: COVID as an Inflection Point
During the COVID-19 pandemic, while many lenders paused disbursals, Propelld increased them. Ground-level data showed improved attendance and engagement, proving education to be counter-cyclical. Despite offering moratoriums, less than 10% of borrowers opted in. Propelld’s NPAs remained around 1-1.2%, validating Senapaty’s belief that “risk discipline beats growth aggression in lending.”
Key Lessons for Aspiring Founders
Senapaty offers several insights for entrepreneurs entering the lending space:
- Understand Risk: Spend time with collections teams to grasp why people fail to repay.
- Respect Compounding: Lending magnifies both profits and mistakes.
- Regulatory Literacy: Founders should understand regulatory intent, not just compliance.
- Hire Problem-Solvers: Early teams should focus on adaptability rather than pedigree.
The Road Ahead: Beyond Lending
Propelld has financed over 400,000 students, disbursing nearly ₹4,000 crore. But Senapaty envisions a broader role for education financing, helping families evaluate the long-term value of courses and institutions.
Future plans include AI-driven underwriting, lower operating costs, and deeper consumer guidance. Senapaty’s ultimate goal is to redefine how India invests in education.
Questions to Consider
- How can other sectors learn from Propelld’s approach to risk and project evaluation?
- What role does personal experience play in shaping a founder’s vision?
Propelld’s journey illustrates the power of combining personal conviction with innovative thinking to address systemic challenges. As India continues to invest in its future, companies like Propelld are paving the way for more efficient and impactful education financing.
