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How did we get here? The Prodigy Finance story

Rishabh Goel - January 13, 2017

How did we get here? The Prodigy Finance story

Prodigy Finance is a pioneer in community-based student financing, providing postgraduate student loans to international students attending top schools globally.

As a community lender, Prodigy Finance loans are collectively funded by a pool of alumni, institutional investors, and qualified private investors that understand the value of top education and provide access to higher education that they might not otherwise be able to finance.

From the outset, the company has focused on social impact. Attending top university is a life-changing opportunity that should be available to all, regardless of financial ability. Many students, without previous access to finance, can dramatically improve their skills, knowledge, and networks, and eventually take those back home to aid their countries of origin.

To date, Prodigy Finance has helped over 6000 students from 118 countries to borrow over $200 million to obtain their dream post-graduate degree.

Our story

Prodigy Finance was born in 2007, as the founders lamented the challenges faced by international postgraduate students in financing their business school degrees.

Cameron Stevens, CEO and co-founder of Prodigy Finance, knew his INSEAD classmates were ideal candidates for low-interest loans. They were successful before acceptance into business school, and most had exceptional credit track-records in their home countries. Their salary would increase after they finished their MBA, and from a lender’s perspective, they were a safe category of borrower.

Why was it so difficult to find financing?

Traditional lenders use credit history to assess risk which varies from country-to-country and is rarely transferable. When someone moves internationally (for school, work, or any other reason), their credit history does not and cannot follow them.

The problem is two-fold for students from emerging markets, who have assets and earnings in soft currencies, yet need to budget for tuition and living expenses in hard currencies.

Exploring solutions to international lending

Unable to transform the assessment metrics employed by traditional lenders, the Prodigy Finance founders looked for solutions that circumvented the way financial institutions assess risk.

The key to moving ahead was a borderless risk algorithm, using home credit history while incorporating the future earning potential and other data points to create a holistic profile of every borrower.

To reach applicants across the world, the process required secure online systems. Given the dependence of visa applications on finances, the ability to provide conditional loan offers within five days became crucial.

Ensuring repayment across countries and continents brought the unique role community plays in the Prodigy Finance model. Community enforcement and transparency incentivise repayment by graduates, develop networks across the platform, and offer alumni the chance to invest in their alma maters and brilliant new talent.

Balancing these challenges, the Prodigy Finance co-founders reached out. Key help came from Michael Ullmann, an INSEAD Professor in the early development stages who remained with the team as Chairman. Finally, the Prodigy Finance site was finally ready for a pilot with the INSEAD class of 2008.

Making education accessible

Expansion was always part of the Prodigy Finance plan. As the model became ingrained at INSEAD, the next step focused on working with the Financial Times Top 100 Business Schools, before incorporating additional disciplines such as engineering, law and public policy.

The ability to offer a product with

  • No co-signer or collateral required,
  • Competitive interest rates,
  • Repayments beginning 6 months after graduation, and
  • No pre-payment penalties

ensures students battling tough local lending policies have options that previously did not exist.

To apply for a Prodigy Finance loan, applicants must be admitted to a postgraduate degree programme at one of the supported schools. The application is swift – usually taking a mere 30 minutes to complete, as the growing number of Prodigy Finance-funded students often remark.

Want to know more about where we’re going? Keep an eye on our blog. If you’re looking for more information on loans available for specific programmes, check out our loan page. And, if you would like to know what borrows think about Prodigy Finance, you’ll definitely want to watch this video. 


Student Story Video

 


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