Prodigy Finance, the Fintech firm that’s focused on cross-border lending for postgraduate international students, has finalized a funding deal from CPP Investments – which will see the institutional investor offer as much as $500 million of financing via its wholly-owned subsidiary CPPIB Credit Investments Inc..
The transaction should allow Prodigy Finance to continue to address the rising demand for international student loans – with applications now up 50% YoY. However, it now means that the firm may take applications from students from several different markets that had previously been excluded because of funding eligibility restrictions.
These areas reportedly include Australia, Bangladesh, Chile, China, France, South Korea, Singapore, Germany, Italy, Japan and most of South America. Their addition means Prodigy Finance will be able to support the goals of students and various organizations from over 120 nations.
This funding round has been announced along with a $250 million facility that Prodigy Finance agreed to in 2020 with development bank, the U.S. International Development Finance Corporation (DFC), which works with the private industry to finance solutions to key challenges facing the developing world. These DFC funds will be channeled towards grant loans offered to postgraduate students with a special focus on low-income and lower-middle-income nations (minimum 50%) and women (minimum 30%).
Being able to provide loans to students from these regions – China currently sends over 100,000 students to the United Kingdom every year and over 300,000 to the US, meanwhile, the US and Canadian schools see 57% and 35% respectively of students coming from these areas – will allow Prodigy Finance to increase how many students it can support.
The larger market should align Prodigy Finance a lot better with the 800+ international schools on its platform and their plans to attract diverse classes.
Schools’ ability to attract diverse talent had been hindered by different travel and visa restrictions following the COVID outbreak. These international schools are now trying to reverse the lower number of Fall enrollments, after a 43% decrease in 2020 in new international students in the United States.
Prodigy Finance’s business model has been formed on the idea or concept that access to financing for international graduate education needs to become truly borderless. It should also be based on future potential instead of present situations or circumstances.
Ideally, it should not matter if a student has been born or resides, or how rich their family is, and is instead based on them being able to access the education required to reach their full potential.
Although lending to students from across the globe, under the UK consumer credit regulation, Prodigy Finance’s payment services allow it to interact with and collect from borrowers wherever they are residing after their study program.
Prodigy Finance has reportedly financed more than $1 billion in graduate education loans. These have been provided to over 20,000 students from 100+ nations.
Prodigy Finance regularly underwrites its loans based on its Future Earning Potential credit model, assisting those without conventional sources of finance or guarantors to enroll at some of the leading Universities.
Joel Frisch, Head of Global Acquisition at Prodigy Finance, stated:
“We have always believed that talent is borderless and finance should be too, so we’re thrilled to now be able to support students from all these additional countries. In total we can now help students from over 120 countries worldwide and want to keep being a leader in helping global talent achieve its true potential.”
Neha Sethi, Head of Capital Markets, remarked:
“Achieving this important funding milestone is another step towards achieving our goal of helping over 25,000 students every year.”
Derek Jackson, Managing Director, Head of European Credit, CPP Investments, added:
“This financial commitment to Prodigy Finance is a great example of our ability to provide flexible funding solutions to complex business needs and fits well with CPP Investments’ credit strategy of investing our patient capital with leading partner organizations.”