MPOWERing Global Students

Abstract

Emanuel Smadja and Mike Davis had cofounded the start-up MPOWER Financing, which offered loans to high-promise international students in US colleges through an application process that opened up credit approval to more than just credit history. Their new lending approach relied on partnerships with universities, pooled private investments, and advanced risk analytics to estimate borrowers' postgraduation earnings and payback ability. Unlike traditional lenders, MPOWER opened application all nationalities and required no guarantees, cosigners, or collateral. Smadja and Davis had taken MPOWER far and fast, thanks to a tsunami of innovations in the financial technology (fintech) field. But the US political sands had shifted, and immigration had become a contentious legislative issue. As a lender to foreign nationals, MPOWER found itself at the intersection of market innovation and government policy, and Smadja questioned how to negotiate that vulnerable ground. He wondered if his company would have to adapt to an altered ecosystem. And if it couldn't, what were his options? Excerpt UVA-ENT-0220 May 25, 2018 MPOWERing Global Students Emmanuel (Manu) Smadja picked up the “Special Innovators and Disruptors Issue” of Washington Life magazine, whose cover was a photo of himself with four other up-and-coming tech entrepreneurs, and flipped to the cover story. He was elated, yet anxious, to see that his start-up was receiving high-profile attention: As an international student from France, Smadja found it hard to get the financial assistance he needed during his college years, relying on odd jobs and financial sacrifices from his family in order to graduate from the University of Virginia. He and co-founder Mike Davis began MPOWER to help the one million international students and more than two million domestic students across the United States whom they say don't have access to traditional student loan options. Putting down the magazine, Smadja's thoughts turned to the personal experience that had been the genesis of his company. As a French citizen, he had had difficulty financing his education in the United States. He recalled: . . .