Goldman Sachs has partnered with MPOWER Financing to provide loans for international students studying in the US and Canada. The partnership is part of Goldman Sachs’ growing investment portfolio in education products. MPOWER Financing has already secured $500m (4,001 Crore) in investments from various investors, including ETS Strategic Capital.
Venture capital investment in fintech and lending in the education sector is attracting a wide range of new and existing players, as they look to diversify their income streams. Moreover, Martin Baseri, of ApplyBoard, recently attended the ASU-GSV conference to promote the imminent launch of a new loan-comparison platform called Passage. The platform may come online later this year and attract investors.
Increased Outbound Student Mobility Fuelled Improved Access to Loans
The increased outbound student mobility, especially from India to major anglophone destinations, is improving access to loans. The provision of globally secure student loans is seen as a way to open up potential from markets. Also, it’s been linked to rapid population and socio-economic growth in the next 25 years, including in Indonesia and Nigeria.
GradRight, which is part of the growing breed of ed-financing companies in India, has witnessed ‘significant growth’ across the student finance sector. The company speculates a 35% compound annual growth rate of disbursements of funds for student loans.
GradRight’s co-founder Sasidhar Sista points out the narrow terms of financial products for students relating to their graduate earnings. He says, “ There is literally a lack of innovation in financial products for students. The different programs have different kinds of outcomes in their careers”. Other than Leverage edu the other competitors in the Indian market include KC Overseas and UniAcco.
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