Prodigy Finance

• As Prodigy Finance closed a $240 million fundraise

in August 2017, the no-cosign, no-collateral
financial services firm was seeking new ways to
expand its business. Over the past ten years, it had
focused on providing loans to international students
at elite business schools who had no assets or
credit history.

• The company used projections of future earnings

based on the students’ schools and profiles rather
than usual measures of creditworthiness, making
cross-border loans that traditional lending
institutions would not consider.

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 ▪ By 2017, Prodigy had funded $410 million in
educational loans to over 9,400 students at 104
top universities.

▪ Borrowers hailed from 118 countries. Seventy-

eight percent of them came from emerging
markets. As Prodigy predicted, the default rate
had been small.

▪ Prodigy credited not only its risk model, but also

its community-building approach to servicing its
loans.

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 ▪ As the company matured, the nature of investors
funding loans through Prodigy evolved from a
purely crowdfunded model to include more
institutional investors.

▪ In particular, Prodigy had enjoyed tremendous

growth since a partnership with Credit Suisse in
2014 to set up the world’s first “higher education
note.”

▪ But along with diversification, came the risk of

losing what made Prodigy special in the eyes of its
stakeholders.

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 ▪ Expansion brought questions about the company’s
identity and the company’s place as an impact
investment.

• Having made headway in the world of business schools,

Prodigy had dipped its toes into new student pools like
engineering, law, and policy. But these forays raised
questions about whether Prodigy’s model would work with
students in other disciplines or countries.

• Having pioneered a successful financing model, Prodigy

also was considering other financial services that could
make use of the company’s risk model.

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 Questions
• How could the company maintain its
community model as it rapidly expanded its
financial base and regions served?
• Should Prodigy serve other discipline
markets or even consider other groups of
international students?
• What new products could Prodigy offer to
support its student borrowers?

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