Edtech startup PhysicsWallah has entered the student loan business by launching FinZ Finance Private Limited, a non-banking finance company (NBFC) licensed by the Reserve Bank of India (RBI) in September last year. The subsidiary began operations in March 2026 with an initial investment of Rs 120 crore, primarily to offer short-term education loans, according to medianama.com.
PhysicsWallah’s co-founder Prateek Maheshwari explained that 70% of the loan funds will be reserved for PhysicsWallah students, while the remaining 30% will be available to external applicants. The company has been financing student loans in partnership with other NBFCs for two years, disbursing Rs 200 crore to 80,000 students so far. The new NBFC will use an AI-powered machine learning algorithm to underwrite loans based on students’ academic performance rather than traditional credit history, leveraging the platform’s access to detailed academic records.
This move positions PhysicsWallah to compete directly in the student loan market, which has seen significant activity from other edtech players. The company’s approach to underwriting loans using academic data rather than credit scores could offer an alternative to conventional lending models, potentially addressing concerns about debt traps seen in the sector. PhysicsWallah’s public listing in November 2025 and its existing student base provide a strong foundation for this expansion.
Looking ahead, PhysicsWallah plans to scale FinZ Finance’s operations and increase loan disbursements, with a focus on leveraging AI to refine credit assessments. The company’s progress in this segment will be closely watched as it seeks to balance growth with responsible lending practices in the education finance space, medianama.com reported.