Debt financing enables scale and expansion to fund the best students around the world. This includes additional U.S. universities, schools and programs, and a new loan refinance product.
Prodigy Finance, the pioneer in cross-border finance, announces that it has raised US$1 billion in the last twelve months in available debt financing (“financing”).
The financing, which includes a number of leading financial institutions, will allow the company to expand its innovative global credit model, which supports high potential students from across 150 countries.
Founder and CEO of Prodigy Finance, Cameron Stevens, said “the world is increasingly global and connected, yet the banking industry has not kept pace. Traditional lenders are bound by local legal constraints, local data, as well as local repayments and collections, which ties an applicant’s credit profile to their location. For example, if you’re born and live in the U.S. you will have greater choice and access to financial services and credit. However, if you’re born in Ghana and want to study abroad, you’re more likely to be unbanked. We’ve worked hard over the years to change this. Our global credit model has allowed us to help international students with limited or no funding options to gain access to life-changing opportunities and become the next generation of leaders around the world.”
The financing primarily consists of US$900 million in institutional debt facilities from American, European and Asian lenders including Deutsche Bank, Goldman Sachs, M&G Investments and Sumitomo Mitsui Banking Corporation. Other investors include schools, family offices and high-net-worth individuals participating in Prodigy Finance’s international bond programme distributed by Credit Suisse.
Stevens added, “we set out to prove and grow our borderless platform and this capital contribution demonstrates its success. The financial services industry will become more global in its outlook and we are leading the charge as we scale our business. This could transform the lives of the 258 million[i] people living outside of their home country, as well as 3.2 billion[ii] of the middle class population that want to access the opportunities that a world class education offers.”
Debt financing enables scale and expansion
Prodigy Finance provides education loans to international students attending top universities around the world. Funding options are particularly limited for these students, even more so for those who live in emerging markets. The company’s unique global credit model is built to assess applicant loan affordability on numerous variables, including projected earnings and university acceptance, among others, rather than historical credit. While technology facilitates worldwide processing and securing online applications.
Prodigy Finance student borrower, Sharon Wandill, said “my life completely changed the moment I came across Prodigy Finance, as it was literally the difference between me going to pursue further studies or not”.
The company began by funding programmes at the top 100 business schools around the world, and over the years, expanded to other countries as well as disciplines including engineering, public policy, law and health sciences. Engineering has been identified as a key growth sector, especially among students from Brazil, Russia, India and China (BRICs), who are trending towards studying abroad and gaining international exposure. In 2016/17, the U.S. was host to 1.078 million international students, of which the most popular field of study was engineering, followed closely by business and management (engineering: 230,711 students; business and management: 200,754 students)[iii]. Unlike their business peers, engineering students are generally younger, with less professional experience, and therefore have lower savings and a greater need for funding assistance.
Today’s financing allows the company to increase its offering, particularly in the field of engineering and at U.S. universities and colleges, including those ranked by the U.S. News & World Report3. The Prodigy Finance platform now supports 245 specific engineering schools and 2,222 courses[iv], including electrical and computer engineering, data analytics, information systems, and industrial, chemical and nuclear engineering, among others; with the option of 10, 15 or 20-year loans terms and without the need for collateral, co-signer or guarantor. The financing also demonstrates that a strong debt financing environment still exists for U.K. firms like Prodigy Finance.
Associate Director of Financial Aid at the London Business School, Helen Foley, said “access to Prodigy Finance funding is very important to London Business School, and to our students. With students from more than 100 countries, embracing diversity is at the heart of everything we do. We recruit top global talent to our programmes. Prodigy Finance’s innovative and community-based approach to borderless student loans provides the financial support many of our students need to start their journeys”.
Financing also enables Prodigy Finance to offer a refinance product to international graduates from U.S. schools looking to reduce their financial costs. These alumni previously had limited options available to them, and Prodigy Finance’s new refinance product provides them with the opportunity to reduce their interest rate, consolidate multiple student loans, release their co-signer and choose from flexible loan terms. The option to refinance is available to eligible international graduates who reside in the U.S. or U.K.
To date, Prodigy Finance has helped over 11,200 students, from 132 countries borrow more than US$538 million; the majority (89%) of which had no alternative access to funds.
[i]United Nations, Department of Economic and Social Affairs, Population Division. (2017). “International Migration Report 2017: Highlights”. Retrieved from
[ii]Brookings Institute. (2017). “The Unprecedented Expansion of the Global Middle Class: An Update”. Global Economy and Development Working Paper 100. Retrieved from https://www.brookings.edu/wp-content/uploads/2017/02/global_20170228_global-middle-class.pdf
[iii]Institute of International Education. (2017). “International Students by Field of Study, 2015/2016 – 2016/2017”. Open Doors Report on International Educational Exchange. Retrieved from
Beyond Transactions: The Payment Revolution
By Marwan Forzley, CEO of Veem
The uninterrupted disruption brought on by the pandemic accelerated the need for robust, digital-first tools created to support remote teams and accelerate online commerce.
As offices across the US moved to work from home for indefinite periods, specialized back office departments handling sensitive information have had to go a layer deeper to find tailored solutions that support the transition of their in-person workflow. For finance teams, payment approvals, issuance, and general management became a challenge overnight. Particularly for those who — even in 2020 — continued to send and receive paper checks through the mail.
For years and even to this day, millions of small business owners around the world have relied on slow and confusing bank processes to manage their business finances. Every day, they spend valuable time using old, complex and expensive platforms to transact with domestic and international vendors — never knowing where their payment is or even when it arrives at its destination.
With ongoing economic and logistical uncertainty looming as we move into 2021, this old norm should not be expected for much longer. This year has seen small business owners wear more hats than ever before, and has influenced a mass adoption of online financial applications that offer heightened security, save more time, and provide more value as budgets tightened.
A study conducted by Mastercard earlier this year saw online business-to-business payments skyrocket in popularity with more than half (57%) of small business owners across North America turning to digital services since the start of the pandemic to improve cash flow and modernize their payment processes.
If this study is of any indication, the days of making an appointment with a banker or sending a wire transfer through an outdated web portal have passed. And the time for the payment revolution is here.
Putting the user in the driver’s seat
Major world events have always acted as a catalyst for innovation and change. As of a result of the growing pains we experienced this year, in 2021 businesses can finally say goodbye to huge transaction fees and bank-imposed gatekeeping when it comes to managing their financial processes.
The financial technology firms, in partnership card and local bank networks and sometimes even each other, have been building and iterating on products over the past decade that were created to work flawlessly from a desktop or smartphone.
For the first time, small businesses have access to needed, user-friendly financial tools packaged to make their lives easier. No longer reserved for major enterprises, those previously underserved by traditional banks can sign up for applications that consolidate billing, payments, working capital and more to one central dashboard.
With the owner in the driver’s seat, they can better communicate with vendors and customers and reallocate their time previously spent manually sending, receiving and reconciling payments toward growing their business — without ever stepping foot out of their home.
Genuinely seamless and automatic integrations with complimentary functions aligned to core financial activities mark a fundamental change in how businesses will choose to operate moving forward. Not only should experiences be integrated, but the entire lifecycle of the transaction should be digital.
Consider a freelance contractor that uses a time tracking and invoicing software to invoice a client. Through an integration between the time tracking tool and Veem (a complete online business payment tool) the client receives and captures the invoice within their Veem payment dashboard. Because Veem and Quickbooks are integrated partners, as soon as the invoice is received, a bill is automatically created, marked as paid, and reconciled on the client’s accounting software as soon as the funds are issued.
In this flow, the contractor only needs to send an invoice, and the client only has to approve the payment for everything else to move. Thoughtful integrations like these empower businesses to log-in to one application, but benefit from several, ultimately eliminating inefficiencies.
Understanding that old habits die hard, it’s expected that businesses of any size have questions when it comes to moving payments from a bank to an online provider.
Answering these questions with unprecedented product value and relentless transparency is the best way forward to bring more businesses onboard in 2021.
This means providing up front pricing, tracking, choice and flexibility to users. Before, during and after the pandemic, cash flow management remains the most critical part of running a small business. Digital payment providers enable the entrepreneur to have unparalleled insight, visibility, and control over their cash flow.
Through non-bank payment options, businesses can secure their information over a secure data network, watch their money move from origin to destination, and choose the speed at which they would like funds to move. By these tools working in harmony, the user can remove friction and spend more time focused on their business.
Separating the signal from the noise
2020 is a year that changed everything for the global small business community. In a report by Veem issued at the start of the pandemic, an overwhelming 80% of businesses shared that they anticipated COVID-19 to impact their business over the next 12-16 months. Problems surfaced that many didn’t even realize they had. And in finding those problems, businesses turned to technology to support them.
As enabling technology, it’s our job to listen and bring clarity and solutions to those contributing to and growing our local and global economies despite the hurdles and challenges they’ve faced.
Right now, small businesses deserve more. More access, more choice and more credit. In the road ahead we expect online payments and bundled user friendly financial services to play a pivotal role in the recovery of small businesses. The payment revolution will see the continuation of important and meaningful products that value the users time and enable businesses to launch, grow, and scale regardless of what’s to come in 2021.
The UK’s hidden payments crisis: why businesses should rethink their payments strategy
By Edwin Abl, Chief Marketing Officer at Modulr.
As the economic conditions imposed by the Coronavirus endure, businesses are facing a dilemma about how to reduce operational costs while meeting customer needs in as economical a way as possible. And all without compromising on their quality of service.
A recent survey of 200 payments decision makers across the UK, revealed there are hidden costs of payment processing which will have an exponentially greater impact on wider businesses if left untreated. It found, UK businesses are spending an average of £1.5m a year in costs attached to payments – money they simply cannot afford to lose to inefficient processes in these uncertain times.
Businesses need to plug any holes in their boat to avoid sinking. And for many this includes the examination and recalibration of their payments strategy.
The research reveals that the payments process now represents a huge 12% of a business’s total operational expenditure. With two-thirds (64%) of all businesses expecting the cost of payment processing to increase over the next two years.
Two thirds (67%) of payments decision makers surveyed believe the way they process, and service payments has had a direct impact on their customer experience. In fact, 62% of respondents believe the hidden costs of poor payments outweigh the hard costs. This indicates that a poor payments strategy is no longer something business leaders can ignore, as it now has a far greater and unseen impact on wider business mechanics.
The top three hidden costs attached to inefficient payment processes were ‘impact on customer experience/satisfaction’ (38%), ‘influence on relationships with other teams and departments (35%) and ‘impact on competitor differentiation’ (31%).
These findings suggest there is widespread consensus that getting payment operations right, directly creates performance boosts elsewhere in the business. When asked to estimate, as a percentage, the business performance boost received if hidden payment inefficiencies were resolved, the average margin for improvement was +14%, with traditional banking the sector most likely (31%) to predict a performance gain greater than +15%.
The 5 key steps UK businesses can take to drive payment efficiencies
There are five key areas payments decision makers and tech leaders should be looking to change, so that they can drive end-to-end payment process efficiencies:
1 – Locate hidden payment process inefficiencies
Visibility is a key issue. Respondents across large (46%) and small businesses (47%) say they have very clear metrics directly related to payment process costs. Only 8% say that they don’t understand the costs involved. Yet, businesses know they could do better with improved visibility of costs. Both large and smaller companies cite ‘lack of visibility for operational costs’ as the top challenge when it comes to achieving strategic goals around payment process and money services provision.
Digital banking companies, including lenders and FinTechs, identified ‘lack of visibility for operational cost’ as a challenge when it comes to increasing payment services revenue (37%). This is in comparison with all respondents mentioning other issues such as lack of skills (25%) and constrained resources (25%) as secondary and tertiary challenges respectively.
For many businesses, developing a cost model for current and projected payment process costs, both hard and hidden, is a top priority.
2 – Make payments key to stakeholder experience management
Customer, departmental and even supply chain partner experiences are increasingly intertwined. There is no doubt that customer experience is a top priority for payment services strategy. But enhancing the broader stakeholder experience is a close second, and certainly complements the former.
Employee experience affects customer experience. So, payment services innovation must extend beyond customer touchpoints. Happy employees who feel they are working with effective and efficient payments systems will be best placed to enhance the customer experience. And, employees in commercial roles who have bought into the benefits of efficient payments will naturally want to extoll those benefits to customers.
Companies with a sophisticated and integrated supply chain are likely to be the frontrunners in implementing the integrated payment services that benefit all stakeholders, due to their historic experience. As customer experience management evolves into a broader discipline of stakeholder experience management, including employees and supply chain partners, it will become more crucial than ever to include payment services experience
3 – Integrate and automate to support payment innovation
Payment innovation is driving a culture change, connecting previously siloed functions such as IT and finance. There is increasing integration of systems from customer relationship management (CRM) and enterprise resource planning (ERP), into accounts and payments. The research tells us that payment processes are impacting nearly every department, affecting areas including customer experience, brand, leadership, business agility and ultimately, revenue. Integration enables new business models for paying suppliers and customers.
Automation is key to driving efficiency, replacing manual error-prone and time-consuming processes with real-time and responsive, digital ones. This is particularly the case when it comes to operational and payment processes.
Indeed, 52% of large companies say that team hours spent on payment processes was their biggest hard cost attached to payments, compared with 26% of smaller companies who share that view. This suggests that automation could contribute more to cutting the cost of payment processes in large companies.
A host of payments-as-a-service providers (including Modulr) are supporting customers to do just this by enabling them to stream a whole unified product ecosystem of payments functionality directly into their own software.
4 – Bring business leaders together
Payments innovation is driving systems integration and creating a more collaborative stakeholder ecosystem. As all the C-level roles become increasingly focused on the customer experience, the finance remit now includes overall business operations and its associated risks and opportunities. The role is evolving beyond just accounting, tax liability and funding. Therefore, closer collaboration between senior leaders is key to driving efficiencies and enhancing customer experience.
5 – Innovate by adding finance and payments to vertical services
Companies with a vertical focus are well placed to innovate by offering new payment services. In many vertical sectors, especially employment services, software vendors are increasingly embedding financial services facilities, such as payments, into their technology platforms. Employment services SaaS providers, across payroll, accounting, bookkeeping and more are offering financial services to existing and new customers within their specific ecosystem.
This means they can develop hyper relevant, convenient and delightful financial products and services for their end users through highly flexible, ‘plumbed in’ payments. This creates an ecosystem of stickier products while boosting the lifetime value of each end user.
Moving forward – engaging technology to drive efficiencies
If the onset of the Coronavirus crisis has taught us anything, it is that there are many advantages to investing in technology and having a digital infrastructure as responsive as your customer-facing experience.
However, whilst digital technologies enable companies to provide customer service in new ways during lockdown. These same businesses are failing to transform their digital strategies, with the biggest priority still being cost reduction (41%).
By not shedding legacy technology and shoring up operational efficiency, UK businesses are following an increasingly risky strategy. And one which will have an exponentially greater impact on the wider business if left untreated. Particularly when this widespread failure to act concerns the customer experiences that sit at the very heart of a proposition – the payments.
To find out how you can drive payment efficiencies into 2021 and beyond, download the full report here for all the insight you need.
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Gain financial regulation qualification online
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Studied online over a period seventeen weeks, you will gain a detailed knowledge of the subject, learn industry best practice and gain a qualification to evidence your understanding.
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Invest in your career
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