When Mrigank Shekhar, Rahul Saxena and Kush Shrivastav were studying in IIT-Delhi, there were several students who did not have access to computers. There were several instances where students would pool in money and buy such students a desktop, so that they could keep up with the coursework.
These were still students who managed to afford the fees. There is still a large chunk of population in India, for whom affordability of quality education is a major challenge.
The cost of education has skyrocketed over the past decade by 160%, be it colleges or even elementary and secondary school. This has become a major setback for middle class families in India to provide their children with quality education.
And with rising competition for various courses and colleges, expensive coaching classes, test prep courses too are being seen as almost a necessity.
Moreover, laptops too have become mandatory for students to be equipped with for attending these colleges.
With all this combined, the cost of getting their children educated is huge and arranging for lump sum amounts every year is every parent’s biggest challenge.
Cut to 2015.
Mrigank, Rahul and Kush, now IIT graduates, were brainstorming to start something that solved a real need, a problem that was complex. At this point they were reminded of their time in IIT.
They decided to tackle this problem and founded Quiklo with the idea of giving loans to students for mobiles and laptops.
After garnering a decent customer base, a lot of customers came back to Quiklo with the need of financing semester fees of colleges. And when the founders looked deeper into the market, they realised that it was huge.
There are indeed several parents who cannot afford to send their children to a good college. And not because the child isn’t smart enough, but because the fees are not affordable.
Thanks to technology and the advent of Fintech startups, getting a loan has become a lot easier. Especially for smaller ticket sizes that banks don’t tend to cater to.
In the past couple of years, a number of startups have emerged that are helping improve financial inclusion.
From personal loans, peer-to-peer lending, education loans, travel loans, these fintech startups are filling all the gaps.
But the market just for education alone is huge.
In the education space, the challenge with commercial banks is that the average ticket size is usually at least Rs 5 lakh. Moreover, they only disburse loans for the top 100 institutions in India.
Quiklo then decided to foray into education loans.
Quiklo offers collateral-free loans to students with relatively smaller ticket size. Its biggest USP is that the loan is approved in a day and the amount is disbursed in the next few days
It runs on both a B2B and B2C model.
The team of Quiklo
Under the B2C model, parents can go to its website or download the app, enter their details, the student’s details, their financial problems, the course fees and submit the application. There is an algorithm that runs to check their credit worthiness depending on a few parameters like salary, etc.
The case is then forwarded to its non-banking financial company (NBFC) partner. Once approved, the loan amount is transferred directly to the college. The loan can then be paid back in easy EMIs.
Under the B2B model, Quiklo ties up with colleges and test prep companies. When a student goes there for admission, the college pitches Quiklo to them in case they are in the need of financing.
In the case of loans for mobiles, tablets or laptop, the loan is given in the name of the student and a background check is run on them before the loan is disbursed.
The average ticket size of a loan is one lakh rupees. The interest rate on each loan varies between 10% and 14%, and can even go as low as 8%.
On the B2B front, it has tied up with 10+ offline and online test prep centres and 15 colleges across Bengaluru, Hyderabad and Chennai.
Revenue is generated through the processing fee and interest rate charged to customers. Quiklo gets a share of the processing fee and interest rate.
Quiklo is currently disbursing loans worth Rs 1.25 crore every month and is growing at 30% month-on-month.
“Our defaults are very low, in the range of 0.5%. A lot of effort goes into getting good customers, so collection is never much of an effort,” says Mrigank.
Despite the market being huge, one of the biggest challenges to the business, Mrigank says, is reaching out to and onboarding customers.
This is something Keerti Kumar Jain of AnyTimeLoan says as well. “A lot of awareness has to be created for education loans. Demand is usually lull not because the market is small but because parents don’t know that loans for this exist,” he says.
AnyTimeLoan offers K12 loans, meaning loans for school students from kindergarten to grade 12. ATL has so far disbursed loans worth Rs 8-8.5 crore rupees, to around 380 parents.
Going forward, Quiklo wants to work on making the onboarding process seamless and eventually make it entirely paperless.
On the B2B front, it aims to tie up with as many as 500 colleges and fund at least 20-25% of the students coming to these institutions.
Quiklo is backed by Accel Partners and Traxcn with a seed fund of $350,000. Accel Partners later invested $2 million in a pre-series A in late 2016.
Quiklo says that it will be soon going into the market to raise another round of funding.
The idea is to take commercial banks and financial institutions, to those people, who the banks do not consider creditworthy.