Enabling international student lending through FinTech

— @Hana Haile-Mariam, @Prodigy Finance

Postgraduate students often have similar profiles after completing their studies, most get prominent jobs, have similar high-paying salaries and long-term career ambitions.

What they don’t have in common is their access to postgraduate student financing.

This problem is the result of the credit scores historically used by most lenders. Credit scores are used to assess whether an individual is a good candidate for a loan, and the parameters of it such as interest rates and credit limits.

Risk models also traditionally look at past repayment via domestic credit reports, previous or current salary, and residential history. This lack of mobility, especially when moving to a new country, is where international students hit a dead end.

A new age of student needs

In this day and age, students are eager to explore different parts of the world, attend graduate school and pursue diverse career opportunities. However, they face the harsh realization that for the most part, their credit score doesn’t transfer with them. This antiquated system of creating credit scores is only relevant in one’s home country, where they’re able to build up a score meaningful and comparable to their domestic lending institutions.

What exactly did this mean for an international student who got into a top school like Wharton in the past?

Unfortunately, few options for financing.

The domestic or international lending options which were available presented the following challenges:

• Collateral or a co-signer, which few students can provide.
• Foreign exchange conversions, by borrowing in one currency and repaying in another.
• High interest rates.

If these options weren’t feasible, students had to turn to family and friends for funds, liquidate assets, or hope for a very large scholarship.

Cameron Stevens, Founder and CEO of Prodigy Finance, faced this issue first-hand when studying at INSEAD — and is why we exist today.

Prodigy Finance emerges

Prodigy Finance believes that education should be borderless, and similarly, so should credit.

Prodigy Finance is a lending platform that provides postgraduate loans to international students. What makes us different is that our proprietary risk model includes numerous variables such as pre-study salary, university acceptance and potential future income. This ensures individual loan affordability whilst removing the need for collateral or co-signers.

Our online application takes about 20 minutes and students can expect to receive an offer within five business days.

It’s our mission to help talent around the world, and we’re proud to support students from 118 different countries.

Prodigy Finance’s unique funding model

We’re a community lender — our loans are collectively funded by alumni who were previously in the shoes of our borrowers, high-net-worth individuals, impact investors, family offices and institutional investors.

Investors invest in publicly-listed bonds, and it is this capital which funds the student loans.

Looking towards the future

In the last ten years, we’ve helped more than 9,500 international postgraduate students attend over 105 universities across 18 countries. So what’s next for Prodigy Finance?

We started off funding business degrees — working with the top universities as ranked by the Financial Times — and have since then expanded our offering to include engineering, public policy and law programs.

We’re also listening to our Prodigy Finance student community and are here to support them, with:

• In-house careers service for graduates to find jobs by introducing them to members of the community in relevant sectors.
• Career coaching, connecting students with mentors.
• The Prodigy Finance Pitch Challenge to engage students across top US MBA programs.
• The Prodigy Finance Ambassador program which gives students access to a diverse network of peers at top universities around the globe.

Many of our borrowers (88%) have told us that they would’ve found it difficult to attend graduate school without us, so it’s important that we continue to expand and grow so that we can help more students achieve their education dreams. Funding shouldn’t be a barrier to education.

For more information on Prodigy’s in-school loan program visit our website here. To learn more about Prodigy’s recently launched refinancing program click here.

Hana Haile-Mariam
Business Development, Prodigy Finance