July 3, 2017
Robert A. Vergara Jr.
Cover art Samantha Gonzales1
Is there money in helping a student make it to college?
For the team behind microfinancing startup InvestEd, there is.
Led by 24‑year‑old Carmina Bayombong, the company was launched in December last year with a goal to provide loans for more Filipino students.
“Our mission is to increase the number of low‑income students that earn a college degree, and we do that through a high‑tech student loan program that prepares all our borrowers for successful repayment, employment, and early career,” Ms. Bayombong told SparkUp.
The social enterprise allows college students to borrow ₱10,000 to ₱80,000 and lets them pay after finishing their degree.
Investing in the platform, which starts at ₱50,000, gives investors a return equivalent to 50% of the interest rate. While it currently prioritizes foundations and financial institutions to invest in the company, InvestEd plans to let individuals to grow their money through the platform in the future.
InvestEd has so far raised a combined ₱704,000 from startup accelerator IdeaSpace Foundation and its first investor Tau Alpha Foundation, Inc.
In its initial operation, the company granted loans to 12 students from the Polytechnic University of the Philippines during their last semester. The next line of lendees included, among others, engineering students from the University of the Philippines.
Apart from loans, the company also provides students with a program that includes personal development training, as well as financial literacy and pre‑employment workshops.
Repayment for students takes a certain period depending on the amount of money they borrowed and starts as soon as they get employed. By this, Ms. Bayombong said students can focus solely on their studies.
“We want to assure quality education by allowing students to focus more on their studies instead of balancing academics and works,” she said. “Loans at InvestEd are only payable after graduation unlike other loan providers wherein repayment is required immediately.”
At present, InvestEd loans are only available for junior and senior college students taking up courses with high labor demand like information technology, computer science, engineering, and accounting.
“Juniors and seniors are the students who are at most risk of dropping out. It is also not that risky to lend to them since they are less likely to shift and have a detailed attendance and record of grades. Lenders are also able to get paid in shorter time.”
As part of its mission to provide loans to more Filipino students, the company does not impose a grade requirement. Lendees are assessed by a credit scoring where academic standing is just among the many components.
“Our loan application is open to any student, knowing that grades are not the sole indicator of repayment and success,” she said.
InvestEd boasts of having the fastest and lowest cost application process with its website.
“We provide lower rates because we are tech‑enabled unlike brick and mortar lenders that have high operation expenses,” she explained.
“We really aim to be the go‑to financial aid program in the country because we’re the most inclusive. We increase access to education, which enable more students to go to college,” she said.
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