WATCH: MPOWER Financing helps students get loans based on their career goals and potential
Founded by Manu Smadja and Michael Davis in 2014, MPOWER Financing's algorithm matches the potential of an individual with that of their career, and ensures that 100 percent of the course fee is financed. It has had a total of up to $1 billion loan requests till now.Vishal Krishna
What if you could get funded based on your potential? Meet MPOWER Financing, a US-based startup founded in 2014 by Manu Smadja and Michael Davis that has an office in Bengaluru. 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.
"The founders wanted to solve why high potential students could not pay their loans. They realised it was because the financial system and the education system were not showing them a path to repay. Instead, they were interested in money. This became a business opportunity for Manu and Michael," says Lana Lodge, Senior VP of MPOWER Financing, and one of the founding team members.
In this video, Lana and Ashwini Kumar, General Manager of MPOWER Financing, tell YourStory how India continues to be one of the largest markets for MPower.
"Indian students don't need to pledge their parents’ property or get them to co-sign. This changes the dynamic for a student who has high potential but no means to access finance for an international degree," says Ashwini.
The company’s loan tenure is of 10 years, and MPOWER guides the student during and after graduation by providing career advice and putting them in touch with career counselors.
"India is a large market, especially with the number of Indians going to study MBA, STEM, and Law. There is a lot of interest in the Arts too," says Ashwini.
Last November, MPOWER Financing completed its largest funding round of $110 million, led by Gray Matters Capital and Community Investment Management (CIM). The company has raised more than $120 million to date. It is now setting up a technical centre in India and is hiring developers.
Most of the money disbursed as loans to students comes from private investors, hedge funds, and institutions. Each student is given a loan of $25,000 at an annual interest rate of 7.99-13.99 percent for a period of 10 years.
Students can pay off their loans via the mobile through the MPOWER app and through the bank. Since building a credit history is important, MPOWER helps students have their credit history recorded for tax purposes. The company hopes to expand its operations in India by setting up its technical centre.
(Edited by Saheli Sen Gupta)