U.K.-based fintech (financial technology) startup Prodigy Finance is now offering scholarships of US$20,000 each to five lucky MBA students who have been accepted to top U.K. and U.S. business schools.
The scholarship is open to all students using the online student loan platform to finance their overseas studies. Those interested in applying for the scholarship must have their loan approved before November 30, 2016.
“Applying to study at one of the world’s top universities is daunting, and at Prodigy Finance we are committed to making this worthwhile investment in your future easier and more accessible,” the company’s co-founder and CEO Cameron Stevens said in a statement.
— Prodigy Finance (@ProdigyFinance) September 5, 2016
Prodigy Finance is an online platform which gives out loans to students who have been accepted to renowned business schools in countries all around the world, but lack the financial means.
The company has recently expanded its reach by including funding for Master’s students on other courses of study, such as LLM (Master of Laws), MPP (Master of Public Policy), and Master of Engineering programs.
According to its website, around 60 percent of MBA and other postgraduate students around the world need funding for their studies, but find it difficult to secure the amount they need.
— Prodigy Finance (@ProdigyFinance) September 8, 2016
At a fintech event in London a couple of months ago, Stevens said: “When we started, we were thinking how do you fund someone from anywhere in the world who has high potential but really is restricted from credit purely because of structural factors. Potential is distributed equally around the world, but finance definitely is not.”
“What this means is you’ve got this whole group of people that are premium profile, very high potential but under-served and excluded because of the difficulties of this going global piece,” he said, as quoted by Business Insider.
The idea to create the platform came about in 2007, after three INSEAD MBA graduates who had experienced difficulties in financing their international MBA decided to make it easier for future students.
How the system works is, the platform collaborates with universities to form a diverse community of alumni, impact investors, and other private entities that wish to invest in students with potential.
— BI UK Tech (@BIUK_Tech) July 23, 2016
To date, the platform has disbursed over US$200 million to more than 5,300 students comprising 116 nationalities since its launch in 2008.
Prodigy Finance’s head of business development, Ricardo Fernandez, told The PIE News: “It’s been a very interesting growth spurt.”
According to the company’s figures, India is currently its biggest market, followed by Latin America. Around 10 percent of the loan funding also goes to students from Africa.
Fernandez said one of the “key differences” that set the platform apart from banks was the fact that it approves loans based on students’ future earnings potential rather than their credit score.
“There’s no collateral, no co-signer and nothing attached,” he said.
— The PIE News (@ThePIENews) August 26, 2016
So how does the company ensure that borrowers pay back their loans?
The company says it relies on social pressure, as investors and school administrators can view each student’s repayment status via an online dashboard, which has led to repayment rates of over 99 percent.
If a student defaults on a loan, the company says it will resort to “legal enforcement processes which can be enforced all over the world”.
— Antoine Tirard (@antirard1) September 9, 2016
However, the company reviews each student’s situation on a case-by-case basis.
“Last year we had two Ukrainian students that could not pay because they were in the middle of where the war was.
“We helped them, we gave them an additional grace period,” said Fernandez by way of example.
Full-time students are given a grace period of six months before they are asked to start repaying their loan, while part-time students are expected to begin their repayment three months after the start of their studies, with a competitive interest rate of between 5.25 percent and 8.5 percent.
For more information regarding the scholarship, visit the company’s official website.
Image via Prodigy Finance