Index Ventures, with participation from Balderton Capital and AlphaCode, have invested R532m in a Series C equity round in Prodigy Finance, an international fintech platform.

In addition, Rand Merchant Investment Holdings (RMI) has provided a R2.66bn debt facility, marking its inaugural investment.

Prodigy Finance has 126 staff across offices in London, Cape Town, and New York, offering loans to postgraduate students accepted into business, engineering, law and public policy degrees at the world’s top universities, such as Harvard, Oxford, INSEAD and the University of Cape Town. 

Since its establishment in 2007, the company has provided more than 7,100 students over R4.32bn in funding. 

The business expects to lend to 20,000 customers by the end of 2018.

The fundraise marks the firm’s tenth anniversary, and will help the UK-headquartered company expand its operations and create highly skilled jobs in its subsidiary locations  at the Cape Town and New York offices.

Prodigy Finance’s unique global credit model assesses applicants based on projected earnings rather than historical credit, allowing the company to provide funding to students without collateral, a cosigner or guarantor. 

To date, more than 80% of its borrowers have had no alternative access to financing. 

It also enables qualified investors, and the alumni of top schools, to help fund students from their alma mater or home country, while earning a financial return.

Cameron Stevens, CEO of Prodigy Finance, said that students from emerging markets were particularly disadvantaged in financing their education at leading universities, and that banks were unable to assist.

“We’re excited about this investment as it will help us double the size of our student portfolio. We saw a market failure in international lending and have spent the last decade rectifying this problem,” he said.

“Our business model and the schools we work with have also allowed us to build a talented team of experts, including our tech professionals and programmers in Cape Town. We believe in financial inclusion and talent mobility, and look forward to continuing to help international students break the funding barrier and further their education at a top school,” he added.