prodigy finance

prodigy finance

Prodigy Finance: Empowering Global Education

1. Introduction

The potential returns that higher education offers, coupled with an increase in demand for higher education from an expanding global population, means that greater competition for seats is inevitable. Additionally, over the past few decades, universities have become more intellectually, geographically, and demographically diverse, in part because of the rising number of international students enrolling in universities. However, the cost of education is increasing at a faster rate than ever and is often the single most significant factor holding prospective students back from their dreams. This is where the Prodigy Finance model steps in and attempts to help: notably, their success lies in offering education loans based on their projected income versus collateral like property and/or financial assets.

Education is an essential enabler of sustained global development – and higher education is one of the largest contributors to the overall development of individuals, fields of expertise, and institutions. The value of higher education via the creation and transfer of knowledge is not widely debated. From a purely economic standpoint, higher education specifically has a proven track record of producing substantial financial returns, both for the individual and for economies. Ultimately, higher education is a ticket to a brighter future – and this is particularly true for international students who have the courage to step out of their comfort zones, offering an intellectual opportunity to challenge themselves, explore differing perspectives, and amplify intellectual growth.

2. Prodigy Finance: A Revolutionary Financing Solution

According to the Reserve Bank of India, the amount of education loans sanctioned increased from ₹34,480 crore in 2014 to ₹85,171 crore in 2019. Despite this expansion, only 50% of applicants were successful in getting a loan. This is because traditional banks typically require some form of collateral, such as land or a house, to issue a loan. Even if the student has collateral, parents are often unwilling to use this collateral to fund their children’s studies. Many students unable to get an education loan by traditional methods eventually seek an education loan through some other means or give up their dreams of studying abroad. Prodigy considers financing methods that recognize academic abilities rather than traditional credit profiles. In essence, the student can use their potential future income to raise funds for their studies.

July and August are school admission times. It is when students get to know whether they are admitted to the school of their first choice or second choice. It is also when universities admit students to a huge number of places across various subjects. July is also when many students are admitted to postgraduate courses in universities all over the world. Over the past few years, an increasing number of students from India are going abroad for higher education. Engineering, finance, liberal arts, and even PhDs are now a real option for many students whose late parents could not afford overseas education. Financial constraints are important considerations for students looking for quality education away from India. Most students and parents do not have the collateral to get an education loan or were not born to the privileged few who could afford education without a loan. In recent years, some students and some parents have been employing a little-known company to pay for their education. An angel investor who does not pay for our education is called Prodigy, which also went public in the UK last week. Prodigy offers student loans to students going abroad.

3. Benefits of Prodigy Finance for Students

Prodigy Finance’s premium money-saving benefits allow students to keep more of their disposable income for living expenses as they study and cover important visa, health insurance, and emergency costs. For our borrowers with excellent credit and completing higher education, fixed-rate loan repayment plans are also available. Students who find themselves in the following circumstances may be particularly keen to use the Prodigy Finance loan to fund their graduate studies: their educational institution outside their home country is not part of an existing full range of loan repayment plan offerings; when home country tuition costs and potential exchange rate decreases might affect their ability to fully cover their full-time tuition, living, and other school-related expenses.

As a student, there are many advantages to using Prodigy Finance. As well as competitive interest rates, a key benefit is Prodigy Finance’s unique loan repayment structure which allows you to make interest-only repayments while you are studying full-time and also offers a graduate repayment holiday if you stay in full-time education and/or are job seeking. This opportunity to start making interest-only repayments to manage overall loan costs is an important benefit to those students who may need it. Additionally, the unique way in which loans are allocated allows us to account for different ranges of future earning potential versus traditional credit models, meaning that strong students can have access to the loan they need.

4. How Prodigy Finance Works

It’s all about aligning our models and understanding of our borrowers and investors, and providing that long-term dialogue between these stakeholders. That’s also the reason we’ve included direct loans rather than only leveraging third-party origination for our funds disbursements. It ensures we’re directly sharing the interest and cash flow from our borrowers with the investors able to access this asset class – certainly not something you’ll find from many other lending businesses or intermediaries. Finally, our efforts on the KYC part of AML have resulted in access for US and European investors, US persons and US-based businesses to buy our notes. The better we do in delivering on the goals of our borrowers’ careers, the better we do for you.

We’ve reviewed the opportunity for a funding solution like Prodigy Finance that embraces impact investing and the borrowers, and the benefits for the students and investors alike. But how does it work? And how do we ensure the system is safe for borrowers and deliver reliable returns for investors? Many of these checks and balances are incorporated into our systems and processes. We’ve worked hard with securitisation, structuring and legal partners to develop a robust solution which puts both our investors’ and student borrowers’ interests at the forefront of our business operations. It’s the very essence of who investors are and why they’re making their investment, together with Prodigy Finance. This has made possible the ratings of some notes we’ve issued. We strive to ensure the features are inherent in the notes we offer, leading to a solid and ethical investment option.

5. Conclusion: Unlocking the Potential of Global Education

As signatories to the United Nations’ Principles for Responsible Management Education, we feel particularly gratified that this research has led to learnings which are in line with the United Nations’ Sustainable Development Goals. By helping talented but under-funded students pursue can contribute to SDG 4 – quality education, to promote lifelong learning opportunities for all, and SDG 10 – reduce inequalities within and among countries. Our efforts work towards providing opportunities for everyone to develop their full potential as these students go on to contribute significantly to economic growth after completing their studies and returning to their home countries. The support of globally mobile students from developing countries is turning out to be an important driver of economic development. Much of the success of globalization in the 21st century will be determined by the success of international postgraduate students. As educators and global citizens, we hope to play our role by ensuring that international postgraduate education continues to be accessible to talented and aspiring students across the globe.

The Returning to Learning study conducted by Prodigy Finance has shown that cross-border education represents a significant opportunity for students to not only upskill with local training but then take back their knowledge to the developing world. Around 94% of respondents who studied in a developed country felt that their foreign education was contributing to their home country’s economic development. Clearly, from an economic, business, and industry perspective, such an impact would materialize only through the return of knowledge and skills obtained in one’s respective countries. This research is a continued validation of Prodigy Finance’s vision of reducing financial barriers for international postgraduate students, thereby allowing bright and aspiring students access to educational opportunities of the world and, in the long run, contribute to global economic growth. Through Research Series, Prodigy Finance hopes to foster an ever-evolving exchange of ideas and research findings in international student finance and contribute to improved student financial services for an increased number of globally mobile students in the future. We would like to thank our research partners, clients, alumni members, and panel of experts involved in this research project.