MPOWERing Global Students

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?