When Carmina Bayombong was studying industrial engineering at the University of the Philippines, she saw dozens of fellow students struggling due to financial concerns. “They were taking on extra jobs and failing to meet their academic potential,” Carmina explained. “Some even dropped out, mostly [due to] transport and food costs.”
Frustrated with the money politics in the country, Carmina and her cofounder, Melissa Dee, decided to launch InvestEd, a student loan service which prioritizes poor and low-income students. Since launching in 2016, InvestEd has loaned about US$200,000 to 276 students.
Yesterday, that venture was recognized on the global stage when Carmina was hailed as this year’s South Asian laureate of the Cartier Women’s Initiative, an annual international business competition identifying and supporting support women-led, impact-driven businesses.
The event, held on May 2 in San Francisco, California, saw seven out of the 21 international finalists selected to receive a $100,000 grant, one-to-one personalized mentoring, and international networking opportunities to help grow their ventures.
Carmina identified her parents as the inspiration behind InvestEd. “They came from great poverty and worked hard to succeed. When I was young they founded a cooperative in our village that has now grown into a small bank. They taught me from a young age how to save and use money wisely.”
With no credit scoring, many students in the country are shut out of traditional bank loans. Even government loans are hard to secure, since they require proof of income from parents. “Most marginalised and unbanked students’ parents have informal jobs, they cannot prove their household income.”
To overcome this problem, InvestEd has developed a three-tier platform to select likely candidates, draw investors and ensure repayment. Its proprietary credit-scoring algorithm measures the probability of timely graduation, career success, and non-payment risk, and is reiterated at regular intervals to constantly improve the model.
“By 2020 we plan to licence it to banks and schools to develop more effective loan programmes,” said Carmina.
Editor’s note: Additional reporting for this story was sourced from the Cartier Women’s Initiative site.