Summary Description
- Lends to Business School candidates/students to fund studies
- Tenor: 1-2 years
- Loans funded by bond issues at commercial rates
- Bond issues mainly subscribed by relevant business school alumni in early years
- Business School endowments often provide match funding to enable bond issues
Opportunity/Investment Thesis
- Commercial banks have retreated from this segment (in Western countries)
- Limited, if any, funding available for talented individuals from Asia, Developing countries
- Attractive franchise (B-school students typically get steady, often well-paid jobs post-graduation)
- Alumni peer pressure helps limit NPLs almost completely
- Scalable, and growth can be fuelled by debt structures and re-financings