Community Research and Development Information Service - CORDIS

H2020

Quotanda Report Summary

Project ID: 735394

Periodic Reporting for period 1 - Quotanda (Quotanda - a lending-as-a-service (LaaS) platform that enables schools and lenders to set up student financing programs to make education more affordable)

Reporting period: 2016-08-01 to 2017-01-31

Summary of the context and overall objectives of the project

Many students and their families worldwide are unable to afford a post-secondary education. Often, the average cost of education exceeds median household income. Furthermore, options for financing education are limited. Due to these factors, many students lack access education.

Scholarships and loans are grossly insufficient to support tuition expenditures in most countries. Students with access to financial aid have a higher probability of attending university. The university educated are significantly more likely to attain full-time employment after graduation with a significant wage premium providing for improved quality of life. Higher education often provides a multi-generational benefit, as children of educated parents are more likely to be educated (ie. in Mexico, students with college educated parents have a 78.3% likelihood of attaining a bachelor’s degree, vs. 7.8% for children with less educated parents).

Financial institutions are not set up to manage student loan programs and, if they are offered, are often costly due to their inefficiency requiring long lines, paper applications and decision times that take weeks or months. However, millennial customers are the future of any retail bank and student loans offer an incredible customer acquisition channel.

With Quotanda’s Lending as a Service (LaaS) platform, financial institutions don’t need to invest in developing new technology or the additional overhead cost to set-up and manage a student financing programs. Banks cannot keep up with fast-moving technology developments across verticals and Quotanda provides a comprehensive solution for lenders.
Foundations can use Quotanda’s platform to manage automated scholarship applications and reporting. In addition, foundations can offer their own student loan programs, which can achieve target returns while fulfilling their mission of helping students access education. With revolving loan funds the same capital can be used to help many more students than scholarships alone.

Governments can now use Quotanda to provide scholarships and loans to students in key development areas (ie. focusing on 1st generation university students etc.). Government student financing options are increasingly popular, as can be seen in the UK, Netherlands, Luxembourg, Denmark, etc.

In many countries, schools (including universities) don’t have access to student financing options despite additional capacity in classrooms. Offering student financing solutions, even in the form of extended payment plans for students that would otherwise be unable to attend, can expand access to education and increase revenue. While many schools manage financing programs internally, often on spreadsheets, professionally managed student financing programs are typically more profitable and allow university administrators to focus on education.

Research from the World Bank shows graduation rates can often double when student financing options are broadly available. Quotanda’s fintech platform allows schools, banks, foundations and governments to quickly launch and to efficiently manage student financing programs without additional overhead costs.

Education is directly related with economic and development progress, increasing access to education and increasing opportunities to students from all socioeconomic levels has huge benefits to society as a whole.

With Quotanda’s technology, Financial Institutions, Schools, Foundations and Governments can set up student financing programs and help us democratize access to education worldwide. The objective of this research has been to prove the need of this technology and the value of its broad application worldwide.

The main objective from this research is to prove the Lending as a Service business model and various applications of this technology. Through the research Quotanda has found an increasing interest from 1) Banks who want to digitalize lending products to appeal to a younger customer base, 2) Schools (including universities) worldwide as well as new skill training programs (ie. code bootcamps), 3) Governments which are lending or interested in lending at at regional or national level, and 4) Foundations that are interested in new tools for expanding their social impact.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

Quotanda performed a market study combining in depth research and attendance to key industry events worldwide.

Quotanda has taken an international approach to identify key stakeholders in different markets, focusing specially in Europe, LATAM and USA. To test the market need in USA and LATAM, Quotanda was selected to participate in the Parallel 18 Accelerator program.

Quotanda’s Lending as a Service (LaaS) platform is part of the new Financial Technology / “Fintech” industry. Quotanda was selected to participate in, and won, the Innotribe LATAM Fintech competition organized by SWIFT. During September, Quotanda attended SIBOS in Geneva, which allowed the company to validate the need of this technology while speaking with banks from around the world.

Quotanda spoke at a conference in Bogota, Colombia organized by the LATAM Association of student lending institutions (APICE). Many institutions have expressed interest in the technology, as their current processes typically include manual lending processes and long decision times.

Quotanda has identified the potential use of its technology within government agencies to provide student loans.

During November Quotanda was focused on the USA and European Market, Quotanda was a finalist of the MasterCard StartPath program, where the company participated and presented its technology product during the Mastercard Innovation Forum with over 1000 attendants from all over the world. This event provided recognition and exposure to new markets. Quotanda also participated in a social impact event in Berlin: Fincluders. This event provided exposure to foundations and development banks. Quotanda will present at KfW Development Bank in Frankfurt in March.

Education is a strategic focus for governments all around the world and it's proven to lower poverty and increase social and economical welfare. Quotanda has tested a scenario where schools, lenders and development banks work all together to improve the outcome of the program. This complex financing structures can work to align the interest of all parties.

Quotanda has identified and prioritized conferences and events to consider attending globally, including Fintech and education related events. Quotanda´s marketing strategy is focused on participating in key events in the Financial Industry Space and the Education space and using B2B sales methodologies. The company has also identified the list of potential target customers within Education Institutions and prioritised them by expected volume of business through a CRM software.

With financial institutions Quotanda will take a direct contact approach and will not perform online marketing activities in the short term as conversion rates of this campaigns is low.

In order to add additional features to the product and increase automation Quotanda will invest in further technology development with current resources and additional tech staff. Quotanda will continue to use lean methodologies for product development to adapt to client needs.

Quotanda has worked with top legal firms to reduce compliance and data protection risks. IP and Trademarks risks have been identified. Quotanda’s technology is built on one of the most secure cloud based platforms which is constantly updated with the last security measures.

Quotanda has produced marketing material and created brand awareness with press releases participating in multiple conferences in Europe, LATAM and USA. Quotanda has built a B2B sales methodology with the help of industry experts. Quotanda has implemented CRM software to improve and measure B2B sales efforts and understand the sales funnel and conversion figures.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

Quotanda’s business model has evolved adapt to market needs. During the 6 month study Quotanda has been able to identify the need of the product and interest by the following institution:

Financial institutions, including community banks and smaller regional banks that don’t have the capability to invest in building this technology in-house and that continue to operate student loan programs with manual processes.

Schools that have additional capacity but don’t have lenders willing to make loans to their students. Through Quotanda, schools can provide extended payment plan programs to students and expand access.

Foundations that can invest in loan programs in addition to scholarships, not just with their grant capital but also their investment portfolio, and receive strong risk adjusted returns. Governments can do the same and incentivise students to major in degrees with strategic importance while increasing transparency and reducing favoritism and corruption.

Quotanda now has a team of 9 professionals. The company is now expanding to serve new customers in several countries.. Product market fit and the value proposition for the main customers are now proven. Additional players are validating the need for this technologies in different verticals (ie. SME lending technology) and new competitors are emerging. Quotanda is in a privileged position with a management team that has unprecedented experience in with student lending and lending as a service.

Quotanda's mission is to democratize access to education. The company’s student financing technology can help lower financial barriers to education in many countries. Quotanda will continue to grow as a sustainable, impact-driven technology company with a global presence.

Related information

Record Number: 198207 / Last updated on: 2017-05-17