WestBridge-Backed Kuhoo Finance Gets NBFC Licence From RBI

SUMMARY

The NBFC licence will allow Kuhoo Finance to offer student loans of up to INR 2 Cr from its own books

With this, Kuhoo has joined the ranks of Fi, Groww, Jupiter and CRED, all of which entered the lending business either by acquiring a licence or another NBFC

Founded in 2021, Kuhoo offers student loans across streams such as MBA, engineering, medical, executive education, upskilling courses, among others

WestBridge Capital-backed lending tech startup Kuhoo Finance has secured a non-banking finance company (NBFC) licence from the Reserve Bank of India. This will pave the way for the startup to offer loans from its own books.

With this, Kuhoo has joined the ranks of Fi, Groww, Jupiter and CRED, all of which forayed into the lending business either by securing a fresh licence or by acquiring another NBFC.

The NBFC licence will help the Mumbai-based startup expand its education finance offerings and increase its lending capacity, it said in a statement.

Kuhoo plans to offer loans of up to INR 2 Cr for courses ranging from management to engineering and medical. It will also offer loans for executive education and upskilling programmes.

Founded in 2021 by Prashant Bhonsle, Kuhoo offers loans to students for undergrad, postgrad and study abroad courses. It provides loans for courses across streams such as MBA, executive education, online courses, coaching classes, and even new age courses. It creates products based on students’ academic backgrounds, college, course rankings, and career prospects.

Only a year after its inception, the startup bagged $20 Mn in funding from WestBridge Capital.

With the NBFC licence, Kuhoo Finance plans to introduce a suite of new loan products to cater to students across various academic streams. It also plans to strengthen its partnerships with educational institutions, banks, and other financial entities.

It must be noted that without an NBFC licence, fintechs are limited to acting as intermediaries connecting borrowers with banks and NBFCs. Acquiring this licence empowers them to lend from their books, thus helping them establish an asset base.

With an NBFC licence in their repertoire, fintechs can squeeze in more profits from their lending business.

Amid rising demand for loans, particularly personal, vehicle and home loans, investor interest in lending tech startups is exploding. Last November, Easy Home Finance raised $35 Mn in its Series B funding round co-led by Claypond Capital, the investment office of Manipal Group’s Ranjan Pai, and Japanese banking giant Sumitomo Mitsui’s Asia Rising Fund.

Prior to that, Fibe (formerly EarlySalary) bagged $90 Mn (about INR 750 Cr) in its Series E funding round led by TR Capital, Trifecta Capital and Amara Partner.