Prodigy Finance, an alternative provider of student loans, has helped almost 11,200 students get to university since its launch in 2007. Of these, 59% of which are the first people in their family to attend graduate school.
The figures–highlighted in Prodigy Finance's 2018 Impact Report—underscore efforts being made across the business education sector to diversify access to graduate management education.
By diversifying cohorts, MBA schools aim to make the business sector, in general, more diverse—and reports show this could make good business sense too. Companies that rank high for ethnic diversity are 43% more likely to see profit gains, one report by consulting group McKinsey & Company shows.
Prodigy Finance was created to help prospective students gain access to education loans, and bases eligibility through metrics such as projected earnings rather than a traditional credit method. Consequently, more students now than ever before have the option of studying for an MBA.
This approach to student loans specifically aids students from emerging markets who may find it difficult to obtain a traditional loan in their home country or country of study.
One of the students who has benefited from Prodigy Finance is Vignesh Baliga.
Vignesh was inspired to study in Germany through his love of engineering and found his dream program at Mannheim Business School. However, the necessity of funding his degree proved difficult; though he initially considered a local loan from an Indian bank, he was discouraged by their high-interest rates and currency fluctuations that would prove costly.
After attending info sessions held by Prodigy Finance in India, Vignesh decided they would be his best option. He now he speaks to other prospective students about the possibilities offered by the lender.
Vignesh is just one of 11,200 students who have depended on Prodigy Finance's support to fund their degree—and the company is now looking into ways tech advancements could allow them to help even more students access graduate management education in the future.
In the Impact Report, Prodigy Finance explores how tech developments such as blockchain could make accessing loans even easier for students from disadvantaged socio-economic backgrounds by lowering excess fees that would usually be paid on top of loans.
Chloë Foden, chief of staff at Prodigy Finance, notes in their report that new technologies like smart contracts—also known as blockchain contracts—would be 'highly compatible' for Prodigy Finance and could help both prospective students and investors.
This type of loan, organised around a self-executing contract stored in a blockchain, would cut out the ‘middleman’, lowering fees and making access to the loan quicker and easier.
They’re also developing a way to help others who are in similar positions to MBA students moving abroad to study. Outside of education, there are 250 million people globally living outside their home country, and these people could face the same problems with accessing loans as students. For example, Chloë suggests that Prodigy Finance could help professionals moving away from their home country for a job opportunity.
In these cases, many people struggle to gain access to a loan in their new country in order to pay a large sum of rent in advance. Lack of a credit history in a new country could cause problems for some professionals, but Prodigy Finance is hoping they can adapt their business model to help these people too.
'These people face the same barriers as our student borrowers in that credit, and the extension of it, is localized,' Chloë says in the report. 'With some tweaks to our model and process, we could help to solve this problem for similar individuals.'