Prodigy Finance to focus on US market
A peer-to-peer (P2P) student lender has raised $240m (£186.2m) to expand in the US. The firm also said that it has secured a $200m debt facility led by a global investment bank. Prodigy Finance intends to break the funding barrier for students looking to study at top international universities with its innovative model that is different from the traditional form of lending. With this investment, the London-based firm aims to double the size of its student portfolio.
Prodigy Finance is engaged in supporting students from emerging economies. It provides loans to international students for studying business, engineering, law and public policy courses at universities and institutions such as London Business School and Harvard University. The loans are collectively funded by a community of alumni, institutional investors and qualified private investors. Till date, the company has provided more than $325m in funding to more than 7,100 students. Out of this, 78 per cent are from emerging markets. It said that even with high credentials and excellent credit quality, students from emerging economies face challenges in financing education.
The firm said that it is now focussing on the US market because of the large number of international students in that country who have contributed $32.8bn to the US economy in 2015-2016 academic year. Similarly, international students contributed 400,000 jobs to the country’s economy during the same period.
“Students from emerging economies such as China, Brazil and India face challenges in accessing financing for education, even with high credentials and excellent credit quality,”
said Cameron Stevens, founder and chief executive of Prodigy Finance.
“This investment will help us double the size of our student portfolio. We believe in financial inclusion and talent mobility, and look forward to continuing to help international students break the funding barrier and further their education at a top international university.”
“Prodigy Finance is opening the doors of the world’s top universities to students who were previously shut out, because they couldn’t fund their education,”
said Neil Rimer, partner at Index Ventures.
“Prodigy Finance is an example of an entrepreneurial financial services company using an innovative model to offer something of great value that is not available from traditional lenders.”