MPOWER is a fintech firm and provider of education loans to international and DACA (Deferred Action for Childhood Arrivals) students interested in studying in the US and Canada. The loans that it offers are non-co-signed and entirely digital as most of its clients are first-generation college students interested in studying in STEM.
The decision whether to extend a loan is made using an algorithm that can analyse the future earning ability as well as both the domestic and overseas credit data of the loaner.
As indicated in the press release, MPOWER is currently working with over 400 universities from Canada and the US, and it provides loans to students from over 200 countries.
MPOWER’s funding track record
This funding is not the only one of this type that the company has obtained recently. In 2022, MPOWER received financing from Deutsche Bank, and in 2021 it raised USD 100 million in funding from various investors, including King Street Capital Management and Tilden Park Capital Management.
As per the press release, Christopher Zaki, head of capital markets at MPOWER, linked Goldman Sachs’ decision to invest in the fintech it represents with the investment bank’s previous funding of fintech companies.
Earlier in 2023, Goldman offered USD 150 million in funding to Tamara, a BNPL Saudi-based fintech that used the investment to further expand its product lines. In the same period, Goldman also funded InsuranceDekho, an India-based insurance fintech startup.
The fundings provided by Goldman Sachs come at a time when the startup market is still affected by the sudden collapse of the Silicon Valley Bank.
How fintech aids students in obtaining loans
The student loan industry has seen significant progress with the participation of fintechs. Apart from loan companies such as MPOWER developing and employing algorithms that can be used when considering possible applicants, fintech solutions also come with benefits for those interested in applying for an educational loan
For instance, interested applicants can use various automatised platforms to readily calculate their loans. Moreover, these platforms feature virtual support services and automated reminders that can help applicants fill in the needed documentation accurately and manage their applications.
Another benefit of fintech platforms is that they can aid with detection and risk management. The risk assessment features that these platforms include can ensure that the risk of a student defaulting on a loan due to lack of funds is reduced. Moreover, those experiencing difficulties paying a loan can take advantage of EMI flexible payment options.
