Education has become very expensive both in India and abroad. In these days of mounting expenses, funding their children’s education has become quite an uphill task for parents in India. They face difficulty in self-financing as also with student educational loans, as most of them require collateral, co-signer, and finally end up paying interest for 30 or 40 years. All these make studying abroad a dream alone for most Indian students.
What if you could get funded based on your potential?
MPOWER Financing provides educational loans to international and DACA students with no collateral, co-signer or credit history. They provide education loans on a fixed rate basis, and the loan is decided on the student’s abilities.
MPOWER Financing, the US-based startup, was co-founded in 2014 by Manu Smadja and Michael Davis. They met when they were in graduate school, and this was a very personal mission for them as they saw students among them who actually had high potential but were struggling to repay their loans or even managing to get loans in the first instance. Few years later, when they noticed that this problem was still unresolved, they wanted to solve it and thus they formed MPOWER Financing or public benefit corporation, which emphasizes the upward socio-economic mobility of access to education of Financial Inclusion. This drives the value in their business performance.
“MPOWER was founded to broaden access to education – including to those who have been neglected by traditional banks. At MPOWER, we believe in making education accessible to all students, regardless of background, through their own potential. This is both a substantial business and social opportunity.”
– Lana Lodge, Senior Vice President
The company uses technology to assess a student’s career goals, potential, and scores, and finances their loans to study abroad. MPOWER Financing’s algorithm matches the potential of an individual with that of their career. Their maximum loan amount per student is $50,000 over two loans, at an annual interest rate of 6.49-13.99 percent for a period of 10 years. The startup is able to bring about changes in the lives of lower middle-income families who wouldn’t have had access to funds for studying abroad otherwise. The application process is very streamlined. For getting loan from MPOWER Financing, students just need to fill up simple information about what school they attended, their past education and what program they are planning on attending.
The startup provides support for obtaining student visa. It helps students during school to make their payments and also help with building their credit history in the U.S. and Canada. As students get close to graduation, career support is provided as well.
India is the number one country when it comes to students applying for education in the U.S. and Canada, and that is why the startup has its office in India at Bengaluru (they fondly call it the sister headquarters). When Ashwini Kumar joined MPOWER as their General Manager and Head of India Operations, he realized the profound culture and the mission fit of the startup.
According to MPOWER Financing, while most of the students in India are opting for the standard MBA, the company finances all streams of courses, whether it is Art, Science, Commerce, Law, etc. The startup is focused on building its growth story in India. In the U.S., you would need credit history for access to any financial services product like cell phone, car, credit card, etc. When a student who has taken loan from MPOWER graduates, he has access to a lower interest rate. Also, in order to honor the students’ financial commitments, the startup helps with resume review, interview preparation, and also leverages its own network to help the students.
MPOWER witnesses increasing demand for its services, and they are making sure that they are personally connected to their customer – the student, with the help of technology.
The startup was named one of the best places to work in Washington DC, one of the best tech workplaces for diversity, and one of American Banker’s top fintech firms to work for the third year in a row.
The Bengaluru and Washington DC-based company works with over 350 top universities and colleges across the US and Canada to provide financing to students from over 200 countries. Since 2014, it has received over $2 billion in loan application volume on its platform.
The startup secured $100 million debt from Goldman Sachs in 2019 and has raised $25 million this year from Tilden Park Capital Management, a New York-based investment management firm. The company said the funding will be used to automate its digital loan platform, whose underwriting technology provides a loan decision to students within minutes. The funding will also be used to grow its team in Bengaluru and expand in the U.S.
The company focuses on sustainable growth that helps them to be a true partner for their universities, for their students, and for their employees as well.