“An investment in knowledge pays the best interest”

Stropro Team
Stropro
Published in
4 min readJun 1, 2022

Benjamin Franklin

Stropro is strongly aligned with the sentiment of B. Franklin. So much so, that we have just launched the Spark Finance ‘Student Loan Fund’ on our platform.

Spark is an impact investment opportunity that provides talented students with affordable and flexible funding to further their education overseas. We are particularly excited to partner with Spark Finance because we believe their methodology, values and market-leading expertise provides a strong foundation for impact and value in the market.

To give you an outline on the thesis, methodology and opportunity behind this investment, we collated a list of questions for Spark’s CEO and Co-Founder, Ewen Hollingsworth.

Why invest in education?

Education has a hugely positive impact on the individual and society.

The benefits of higher education are clear and ubiquitous. Individuals with a university degree are wealthier, happier and healthier. University graduates earn more than non-university graduates and are almost 50% less likely to be unemployed. If you attend a Top 100 University you have a 1 in 30 chance of being in the top 1% of earners. If you don’t attend university, that plummets to 1 in 1000. Higher educated people also tend to live longer (0.6 years for every additional year of study), have less risk of heart disease and greater life satisfaction.

Society also benefits from a more educated population. A more educated society leads to faster economic growth, greater innovation and increased tax revenues, while reducing the burden on public finances. Education reduces crimes and gender-based violence; an increase of one year of a country’s average education level decreases arrests by 11%. Education also leads to greater social cohesion, trust and tolerance and improved political stability in a nation.

Put simply, education is the silver bullet.

What are the barriers in the market?

International higher education is expensive with limited financing options.

The benefits for education are undeniable, however the opportunity for such study can be costly. A Masters program in Europe or the US can cost upwards of AUD $100k per annum. Education is often the second largest expense an individual will make in their lifetime. The three most expensive markets for international education are, Australia, the UK and the US.

Australia is particularly expensive for international studies; when combined with living expenses, Sydney and Melbourne are, on average, the most expensive locations in the world to study.

This in itself is a problem, however it is compounded by the fact there are limited financing options. Almost 80% of international students say they need to rely on friends or family to finance their studies. Only 4% of students are able to rely on their own assets or savings.

This fact means that unless a student is from a wealthy background they are priced out of life-changing education.

What does Spark do?

Spark provides tuition financing for university students.

Spark aims to remove the financial barrier to education by providing tuition loans for international students. Spark assists two types of students; ANZ students studying overseas, primarily in the US and Europe, and international postgraduate students studying in Australia. Spark’s loans are for tuition fees only and are payable directly to the university, to remove the risk of misappropriation. Repayment of the loans occur after the student completes their Masters program, allowing the student to focus on their studies.

How do you do it?

Spark is able to do this via is unique underwriting technology.

Typical lenders only assess two aspects of a borrower; their past credit behaviour and their present financial situation. They do this through such data as credit scores, incomes, assets and debts.

Spark has developed a unique approach to assess the future earnings potential of a student, including their likelihood of employment after graduation and future salary. They do this via data provided by universities and governments and their own proprietary data. Spark has also worked with the UNSW Econometrics School to make this model more robust and ensure it remains a strong competitive advantage into the future.

Give us a bit more information about the investment opportunity

The opportunity provides strong, impact-adjusted returns to investors.

Spark Finance Group is offering investment in notes with a target 11% return, which will be used to cover student loans for Australian and New Zealand students that have been accepted to study at top tier universities:

  • The note proceeds will cover a maximum of $1,500,000 commitment to a minimum of $1,875,000 of student tuition fees. No student will have more than 10% of the total loans in the book.
  • Spark Finance Group will provide a $250,000 commitment which will secure 16.7% of the interest repayments to investors.
  • Investors will also receive equity warrants in Spark Finance Group at an approximate allocation of 0.01% for every $10,000 invested.

Note from Stropro: There is approximately 700,000 left in this investment.

This article is for educational purposes and is not a substitute for professional and tailored financial advice. This article expresses the views of the author(s) at a point in time, which may change in the future with no obligation on Stropro or the author to publicly update these views. This article uses information from sources the author considers to be reliable but does not represent that such information is accurate or complete, or that it should be relied upon. Past performance is not a reliable indicator of future performance. Investments may rise and fall in value and returns cannot be guaranteed. Stropro makes no representations or warranties, express or implied, as to the accuracy or completeness of the information it provides. Stropro Operations Pty Ltd (ABN 28 633 603 399) is a Corporate Authorised Representative (CAR №1293257) of Stropro Compliance Pty Ltd (ABN 74 640 214 740, AFSL №533443).

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Stropro Team
Stropro
Writer for

Stropro is Australia’s dedicated platform for sophisticated investors, we offer exclusive institutional opportunities from the world’s leading investment banks.