Digital Reporter

Student loans are not as ubiquitous here as in the United States. In fact, the Philippine Statistics Authority estimates that 600,000 college students dropout annually due to financial problems. That’s one in five students.
But in this era of the sharing economy, getting a student loan need not be a tedious process of finding a needle in a haystack, especially because a Filipino startup engaged in matching student borrowers with lenders via an online platform was awarded a $100,000 grant from the government of Dubai last week to accelerate its expansion.
InvestEd, a company ran by 24-year-old CEO Carmina Bayombong, was among the 26 social enterprises from 30 countries that won the grant under the Dubai World Expo 2020 (Expo2020) program. Expo2020, which will be held in Dubai from October 20, 2020 to April 10, 2021, is a global convention that will showcase innovative businesses from different countries. More than 100 countries, including the Philippines, are set to join the expo.
“I witnessed a lot of my friends drop out due to financial problems,” Bayombong said in a previous speaking engagement at SparkUp’s Spark Series X Far Eastern University. “That got me thinking, why is financial aid in education such a hard thing to come by?”
Launched in December 2016, InvestEd offers student loans amounting from ₱10,000 to ₱80,000. Students need only to create a borrower account invested.phonline, get notified of qualification within seven business days, be interviewed for a final assessment, and sign a loan agreement that they will pay their loan after finishing their degree.
Where does the money come from?
InvestEd gets investors—lenders—who are promised that they can grow their money for 7%-11% per annum with a minimum amount of ₱100,000, deposited in tranches.
To secure their investment, a six-point approach to repayment is enforced. This includes multiple matching, where a lender is matched with at least three borrowers to reduce risk, as well as a credit investigation technology using a credit scoring and profiling algorithm powered by artificial intelligence. Lenders are repaid bi-monthly over 12 to 36 months, depending on the student’s loan amount and starting salary. An amortization schedule is provided after depositing their pledge.
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 personal development training, financial literacy classes and pre‑employment workshops. Because of this supplementary program, borrowers get employed 33 days after graduating, compared to the national average of four to six months.
In a Facebook post, InvestEd said it will use the funding for its plan to increase the number of its loaners from 70 to 3,500 students.

Currently, InvestEd serves students across Metro Manila, Bulacan, Laguna, Batangas, Camarines Sur, and the Cagayan Valley. The grant will allow them to widen their reach.

To learn more about InvestEd, click here.