Indian lending start-up Finwego preps for launch
Chennai-based lendtech start-up Finwego has won an innovation challenge and is readying for launch.
Shiv Vadivelalagan, co-founder and CEO of Finwego, says: “After four fulfilling years in the US, I’ll be moving back to where I belong – India – to build a fintech venture, backed by Harvard Innovation Lab.”
The firm has got some momentum as it has just won a $25,000 award at the Harvard President Innovation Challenge. It was chosen from a “whooping” (maybe they were noisy, but he probably means ‘whopping’) 430 applications from across all nine Harvard schools.
Lending firms are rapidly springing up all over India (and the rest of the world) as bright minds scent money to be made.
Finwego joins this heaving throng and acts as a “financial access platform” that provides personal loans to employees working for its employer partners.
The company explains: “Millions of lower-middle class customers working for small and medium businesses don’t have a decent option for short-term credit despite a stable job and a regular salary. To solve this problem, Finwego partners with small and medium businesses and uses employment data to underwrite short-term credit for their employees.”
Loan applications are made online and the firm accesses employment data from the employer. Finwego says all data and documents are taken directly from the employer.
It charges a 2% processing fee on all loans and its interest rates range from 18% to 24%.
Finwego says these interest rates are entirely based on its artificial intelligence (AI) powered algorithm.
This crunches a variety of employment related data such as length of employment, time-in/time-out attendance data, leave pattern, salary increments, bonus payouts and other performance related variables to create a picture of the individual.
The firm is still in the hiring phase – such as looking for a loan operations officer.
Pavee Ramanisankar is the other co-founder and a “serial entrepreneur” who has owned companies in manufacturing and education.
Vadivelalagan has around eight years of experience in payments, microfinance and consumer lending.
Finwego is the consumer brand of Meitrail Financial Services. The latter is an unlisted private company incorporated on 9 March 2018. The registered office of the company is also in Chennai.