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Investing in HENRYs to boost the supply of tomorrow’s leaders

High Earners Not Rich Yet, or HENRYs, are the key to Prodigy Finance’s plans to increase access to higher education for promising, but cash-strapped, students around the world.

Prodigy, headquartered in London, has disbursed $318 million to finance the education of 6,800 students from over 125 nationalities over the last decade. Nearly eight in 10 of the borrowers are from emerging markets and most tell Prodigy they had no other way to finance their studies.

The number of international students in the U.S. has increased five-fold in recent years. This week, at a gathering at its New York offices, the firm launched its first bond available to accredited U.S. investors. Prodigy will provide loans to international students seeking a U.S. education at top business and engineering schools but who have difficulty getting a loan.

Capital for the loans comes from the the sale of bonds, which can be customized to target students in India or Latin America, for example, or by student characteristic, such as gender. The secret: assess students’ earning potential, not their savings.

Delinquency rates on the fixed-income, low-risk bond are only 1.5%. “Students are an asset,” said Prodigy’s Joel Frisch. “Investing in education is a game changer.”

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