“The market opportunity for international student loans stands at $100 billion” Mayank Sharma Country Head, India, Prodigy Finance
Financial markets have also rebounded this year but we are nevertheless treading carefully and ensuring we give students more information about exactly when their loans will be confirmed and disbursed.
1. Brief us about your business payday loan stores in Taylorsville model like how did the idea came to start and how does it work (step-by-step procedure)?
We established Prodigy Finance with a philosophy that funding shouldn’t be a barrier to education. It was 2007 when three MBA students recognised that traditional banks don’t serve the needs of international borrowers. They demand collateral, co-signers, guarantors or documentation that most of the students simply don’t have. This was when we thought of using fintech to redefine the student loan market and make quality education accessible. Prodigy Finance is not a bank. We raise money from impact investors and institutions (who get to invest in tomorrow’s leaders whilst earning a financial and social return), and turn them into education loans for international students.
We follow a simple and modern loan process based on the future potential of students and not their current circumstances. Our innovative and borderless model means we do not ask for collateral or a co-signer and whilst we do ask for the credit history of an applicant, it is also possible to get our loans without submitting the same. We are more interested in what college/university the students are going to and what course they will study.
What sets us apart from other lending platforms is our potential-based credit model and global footprint that enables us to lend to students that other lenders ignore. In fact, 89% of our customers said Prodigy Finance was the only way they could fund their degree. Moreover, our loan process is entirely online – all the application, verification and documentation are done through a secure portal on our website. The loan amount is then disbursed directly to the school (who retain the tuition fee and pass on any requested living expenses to the student). We also have a team of agents available to chat with for any assistance.
Last year, we secured a landent Finance Corporation, which is essentially America’s development bank. We also have facilities with Goldman Sachs and Deutsche Bank and have raised funds from our community of private investors. So we are in a good position this year. However, we are continuing to explore further funding deals in a bid to add even more growth next year.
Our monetisation model works 2 ways: a one-off admin fee that covers our origination process and a servicing fee, which is paid by our investors for us to manage the student repayments. We do not make money based on the rates of our loans.
2020 was a tough year for many. The effects of COVID forced the financial ount of capital we could supply in a timely manner to students last year. We also saw severe uncertainty in students traveling abroad for higher education. While we initially saw a significant portion of students defer their studies to 2021 or beyond, we have seen a strong pickup of student demand this year. Financial markets have also rebounded this year but we are nevertheless treading carefully and ensuring we give students more information about exactly when their loans will be confirmed and disbursed. In addition to that, whilst India is not affected there are other markets where we have had to limit our business due to either regulatory or funding restrictions.
“The market opportunity for international student loans stands at $100 billion” Mayank Sharma Country Head, India, Prodigy Finance
At Prodigy Finance, we understand higher education. Unlike most of our competitors, we fully appreciate and understand the challenges that a student faces when he or she embarks on a journey of studying abroad. The idea of Prodigy Finance germinated from our founder’s personal struggles while securing a study loan for his MBA at INSEAD Business School in France. Our team comprises a good mix of people who have studied abroad and keep the customers at the core of everything we do. As a result, we have been able to create a unique position for ourselves in this competitive ong the study abroad aspirants in India and a lot of our current borrowers end up recommending us to their friends & juniors, which has been one of the core drivers of our growth.
