MBA students from Africa and Asia have been awarded £100m so they can attend some of Europe and America’s top business schools.
The money was raised through crowdfunding; the practice of funding a project or venture through small amounts of money raised from a large number of people, typically achieved via the internet. In this case, the funds were raised by a team of organisations and budding entrepreneurs, including Ed Wray, the co-founder of Betfair.
The crowdfunding platform, Prodigy Finance, was led by South-African born company President Cameron Stevens, and co-founded by three INSEAD Business School graduates, after growing concern at the number of prospective MBA students who were declined finance from the bank.
— Balderton Capital (@balderton) August 10, 2015
Despite their potential for future earnings, a huge number of students wishing to study an MBA at some of the world’s top schools were being refused due to their lack of credible finance records. According to the latest QS Jobs & Salary Trends Report, the average starting salary for U.S MBA graduates is $128,600.
Among Harvard Business graduates, the biggest earners are Presidents, who rake in approximately $240,000 each year. Chief Executive Officers are next on the list, bringing in $223,000, and these are closely followed by Vice Presidents of Product Management, who reportedly bring in$195,000 a year.
Many overseas students are struggling to persuade banks to lend them money in spite of future prospects that are undeniably higher than average, and many simply can not afford to pay the colossal six-figure course fees.
According to research published by Unesco, last year alone, an estimated 250 million children in developing countries across the world were not learning even basic reading and maths skills despite having spent the past four years in school. Unesco warns that this “global learning crisis” costs these countries billions of dollars each year in wasted education funding.
Unesco’s director-general, Irina Borkova, noted in a foreword to the 11th Annual Education for All Global Monitoring Report that: “Access [to education] is not the only crisis- poor quality is holding back learning even for those who make it to school.”
— UNESCO (@UNESCO) October 17, 2012
Students from these countries who dream of studying an MBA at a world-class institution overseas have battled against the odds to get through school in their native country. Their education system lacks quality as well as funding, and visions of attending a prestigious business school often gives them promise of a better future. The schools however, tend to disregard student talent and ambition, and consistently refuse them entry due to inability to pay the fees.
The lack of support for these dedicated post-graduate students inspired Stevens and his team to create a globally accessible platform to provide funding for these students. The money was donated by alumni, institutional investors as well as quality private investors who will enjoy a satisfying return on their expense, since the students- the majority deriving from poor, developing countries- will be able to fund their studies and therefore attend these schools.
Since Prodigy Finance was launched back in 2007, it has treated more than $130m of student loans for 2,000 MBA students from 90 different countries. Its website points out that the reimbursement of these student loans is in excess of 99%.
— Prodigy Finance (@ProdigyFinance) August 13, 2015
Stevens predicts that the company will process $1 billion of student loans by 2017. Approximately 60 of the world’s top business schools already support the platform, including Oxford Saïd, Chicago Booth, Wharton and London Business School.
More than three quarters of Prodigy’s recipients came from the world’s developing countries, including Russia, India, China and about a third from Brazil, many of whom will easily find jobs in their home countries upon completion of their studies, and according to Mr Stevens, this cements the investment as relatively low-risk.
Stevens told the Financial Times: “We don’t care if you move from Shanghai, Dubai or New York because it is a global market.
“In the past, someone coming from China to study in London would have to stay in the UK to find work. Now they can return to work for Google in Shanghai.”
— Reality Crowd TV (@RealityCrowdTV) August 12, 2015
Tim Bunting, who sits on Prodigy’s board along with Mr Wray, also spoke to FT. He said that: “Cameron and his team have created a global execution platform that gives investors the opportunity to fund international students in a meritocratic fashion that positively challenges the status quo. This is a huge win for the students.”
Crowdfunding platforms such as the one created by Mr Stevens could potentially make post-graduate education affordable and accessible to talented students across the globe. Furthermore, with countries like the UK cracking down on student visas and many international students failing to see the benefits of studying overseas, the prospect of work back in their native country upon completion of a programme that is world-renowned could be the answer to their problems.
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