How Payed credits a child’s future and lends parents a hand to cover school loans

For the 150 million school children in India, education is of prime importance. Yet, with the exorbitant fee hikes in recent years, parents deal with a financial crunch that this startup helps address by offering formal credit solutions.

Most schools these days charge fees upfront, and the ordinary Indian parent is forced to go to loan sharks to pay for a child’s education.

Ask any average blue collar worker in India and he or she will speak about the trials and tribulations of funding a child’s education.

“I believe parents should pay on a monthly basis, and not upfront for the whole year. I realised that this was a problem as most parents don’t have the savings to pay upfront,” says NV Subramanian, Founder and CEO of Payed.

N V Subramanian

This was the reason Payed came into existence - to smoothen out the financial crunch facing parents. Given the protests across the country due to fee hikes, it was time to address this issue. Payed also came out of NV Subramanian’s personal experience. It addresses a core issue of lump some fee payment and on-time fee collection by educational institutes.

Payed was launched in January 2018 when Subramanian decided that he had to do something about giving parents access to formal credit. Today, Payed has 100 customers on board. 

As an affordable, subscription-based solution that requires absolutely no collaterals, deposits, payment gateway charges, processing or application fees, Payed frees the parents from the hassle of paying fees quarterly, semester-wise, annually or availing interest-ridden loans from the market.

Instead, it helps education institutes get paid as per schedule, freeing them to focus more on academics, without any cost or risk. At the core, it works with parents, education institutions, and financing institutions.

Parents can also secure loans, and Payed has created a new loan category for financing institutions while also helping schools in payment collections. 

The founder’s journey

NVS, a graduate of BITS Pilani and IIM Lucknow, with more than 17 years of work experience in ITC, Future Group, Samara Capital, and Snapdeal, has throughout his career built businesses around consumers: managed large teams (1,500 people), led large businesses (Rs 1,000 crore revenue) and won numerous awards (example, best iOS app of the year, marketplace category, for Shopo in 2015).

Creating innovative solutions with technology has been NVS’ legacy be it India’s first smart card-based CRM solution at ITC or the chat-based ecommerce platform at Snapdeal (Shopo) among others. This foray marks his entry into the education sector.

The idea

As a subscription-styled solution, Payed can be accessed with an application online free of cost. The application process is digital, and does not involve any visit to a bank, submission of any collateral or cash deposits. The subscription charges are transparently mentioned on Payed’s website, unlike any other financial service. Applicants are evaluated on a few standard parameters. And once selected, they receive their Payed card and account within seven to 15 days.

The investing, the learning

Payed secured angel funding from reputed investors and leaders from the education and financial services industry, and a line of credit up to Rs 100 crore from RBL Bank. The founder himself has invested Rs 40 lakh in the business.

"The key challenges have been building a financial product offering (subscription-styled) different from usual options present in the market (loans, subvention etc.), and convincing reputed financial partners to back us. The other challenge includes communicating this novel concept to different stakeholders,” says NVS.

The business

In the next 12 months, Payed wants to help 10,000 salaried parents become Payed customers, and it aims to wrap up a round of institutional funding too. “We plan to expand our team to about 30 to 40 people from the current strength of 10. We have a long-term vision of processing education fees worth $1 to $5 billion in the next five to seven years,” NVS adds.

"We have received a very encouraging and positive response from middle class parents - our key target audience. We are looking to engage with parents within an income bracket starting from Rs 3 lakh to Rs 20 lakh to Rs 25 lakh. We receive anywhere between 50 to 100 applications from salaried parents daily,” NVS explains.

What’s more, over 50 plus quality institutions have adopted Payed to offer a monthly fee payment module.

It is a platform that empowers parents to pay pre-schools, schools, colleges and coaching centre fees monthly in a simple and seamless manner.

Parents can pay education fees online to institutes through and repay monthly. Customers can also access Payed through RBL Bank’s co-brand credit card partner, which works on the Mastercard network. The solution also helps parents earn rewards up to Rs 12,500 per annum on use basis.

The market

According to IBEF, the education sector in India is estimated at $91.7 billion in FY18 and is expected to reach $101.1 billion in FY19.

MPower Financing works with a similar model in the USA though it only gives loans, and does not collect fees on behalf of the institutes. The company competes with regular fintech companies. Gyan Dhan, Credila, and Shiksha are some of the companies that provide finance to students. Yet, there is no business focused on parents. Proving that NV Subramanian is right on the money.

(Edited by Suruchi Kapur Gomes)


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