This Pinay Started A Loan Program That's Helped Over 300+ Students From Low-Income Families

Meet Carmina Bayombong, the CEO of InvestEd.
PHOTO: Courtesy of Carmina Bayombong

It's no secret that we still have a long way to go when it comes to the education system in the Philippines. Some days, it almost feels impossible to tackle it all, but one Pinay has made it her life's work to help young Filipinos get the education they deserve. 

Meet Carmina Bayombong, the woman behind InvestEd. Launched in 2016, InvestEd is a program that provides loans to students in need through a proprietary credit rating algorithm. And if that's not impressive, Carmina is one of seven laureates of the 2019 Cartier Women's Initiative, a prestigious international business competition, where she was recognized for her work in InvestEd. 

Courtesy of Carmina Bayombong
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Cosmopolitan got the chance to interview Carmina via email to find out more about her advocacy. 

What's the story behind InvestEd?


Carmina: 
My InvestEd journey began when I was young. My parents both struggled to get their college education due to poverty. My mom, for example, had nine siblings and farmers for parents; she paid for her degree through scholarships. I know the power of education simply by being her daughter. As an adult, my mom spent more than 20 years of her career in micro finance. And when I was young, I remember asking her why she gave loans to people she didn't know. She taught me that it was because loans gave people the opportunity to succeed.

Two years ago, when InvestEd was struggling to get off the ground, my mom took a big chunk of her retirement fund and became the first investor of InvestEd. My InvestEd journey also continued when I was in college. That time, I became even more aware of the challenges faced by students from low-income families. Due to the lack of financing options, a lot of my peers had to work part-time jobs on top of the heavy academic workload in order to sustain college expenses.

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My dream is to see a world where every young person has the opportunity to fulfill their dreams and help others do the same.

In the process, I witnessed many of them fail to reach their potential or even drop out of college. Apart from this, I also managed three scholarship funds back in college and was a Sangguniang Kabataan Chairperson in my province in Bulacan. There, I saw the gaps in our college financial aid system from the donor and government standpoint. When I spoke to donors, they would share that there was sometimes lack of fulfillment because they don't know what happens to their scholars.

After college, I followed my curiosity about how business models played a role in social change: I worked with Smarter Good to handle fundraising millions of dollars for social enterprises across the US, Nigeria, and Southeast Asia. Over the past eight years, I have also trained more than 6,000 youth in topics of employment, financial literacy, peace building, and entrepreneurship. Overall, my development experience taught me that the problem of college financing was not just local, but also global. After years of immersion in the problem of education financing, I decided to start InvestEd. My dream is to see a world where every young person has the opportunity to fulfill their dreams and help others do the same.

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Courtesy of Carmina Bayombong

How has InvestEd grown since it launched in 2016?


InvestEd first started by providing small loans of P12,500 each to 12 students in one university. After that successful pilot, we decided to expand to five regions and now we are nationwide since January 2019. Now, we are proud of having served 300+ students. A lot of challenges were encountered, such as communicating how "loaning" works to Filipino students (because loans are always seen so negatively), ensuring that borrowers had good jobs and figuring out how to motivate and ensure repayment. We hurdled such problems by having a clear and unwavering focus on our mission and having the ability to adapt and change based on customer learnings.

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What's been the best part of running InvestEd?


So far, the best part about running InvestEd is being able to change broken systems. For example, when we were starting InvestEd, one of the first things we had to decide was what kinds of students we wanted to give education loans to.

When we consulted top experts in the financial industry about our idea, they kept telling us never to lend to the poor because they would never pay their loans. And perhaps one of the most painful things the "experts" kept telling me was to never lend to women, because they will get pregnant and not pay their loans.

Of course, our team wanted to give loans to students from the poorest backgrounds—those who had little opportunity to get a college degree. Unfortunately, when we consulted top experts in the financial industry about our idea, they kept telling us never to lend to the poor because they would never pay their loans. And perhaps one of the most painful things the "experts" kept telling me was to never lend to women, because they will get pregnant and not pay their loans.

One of the hardest choices we've ever had to make at InvestEd was to not follow the experts. We did the exact opposite. Today, we are lending to students coming from families living on less than $2 (P103) per day. And more than 50 percent of our borrowers are WOMEN. And yes, a lot did get pregnant, but everyone is paying their loans. Today, we have a 100 percent repayment rate.

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This is all because we chose not to follow experts. We trusted our gut and our mission and we'll continue to keep doing that in growing this company. The world we know today was built by the experts of today. So if you want to change the world, it's okay to not follow the experts.

What's been InvestEd's biggest challenge?


The problem we're solving at InvestEd is a 100-year-old problem that no one has been able to crack, and that is solving access to higher education for the poor. In the developing world, there's around 500 million youth who can't access higher education; the biggest challenge in this work is having the patience to really solve the problem.

There's no quick way to solve a 100-year-old problem. It's like a scientific experiment that you must keep doing repeatedly until you achieve a breakthrough. In fact, if you're solving the problem too quickly, it could be that you're not solving the root cause. Many people have told us to just focus on growth, too. Although growth and big valuations are good for startups, we're not just interested in that. We're most interested in solving a seemingly impossible problem.

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Has it been difficult to get investors?


Everyday I encounter two very different worlds.

Most of the time, I find myself in closed door meetings with millionaires, impact investors, and philanthropists, trying to convince them why it would be worthwhile to loan some of their money to a student.

95 percent of the time, nobody wants to risk lending even a tiny piece of their wealth to our students, in spite of our good repayment rates. Sometimes, it's for a set of reasons that I respect and understand. Most of the time, however, it's because they just don't want to take the risk. [The remaining five percent involves] wealthy people [who] listen to our students' stories and what we envision at InvestEd. They would ask interesting questions, give me honest feedback, offer me connections, and sometimes, a small piece of their money.

This is what makes our work difficult: getting the One Percent to care and take a risk, while telling the bottom 40 percent that with our small loan, they can have a future without risks.

In another world, I find myself encountering students who just need P35,000 to graduate—P35,000 they can't earn even if they worked many part time jobs. This is what makes our work difficult: getting the One Percent to care and take a risk, while telling the bottom 40 percent that with our small loan, they can have a future without risks.

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I assured lenders our system would work simply by getting results, which is our 100 percent repayment rate. This is why scaling a business that lends to students in poverty is a patience game. We started with loans to 12 students in their last semester and had to wait for them to repay until we could really raise larger amounts of money from lenders. Our first lenders who funded the 12 students were donors I knew from managing scholarship funds before. They simply believed in the idea of a more sustainable financing program. After the 12 students, we expanded the proof to 80 students and now to hundreds of students.

Who's the team behind InvestEd?


InvestEd is currently led by me and my co-founder Melissa Dee, and we both dream of changing the game for underprivileged students. Along with our four other co-founders, we witnessed many of our peers drop out of college due to financial difficulties. We thought, how come in developing countries such as the Philippines, inclusive and sustainable student loan programs for the poor do not exist? It was with that curious thought that we started venturing into a business that would help underprivileged college students in a systemic scale.

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Courtesy of Carmina Bayombong

What are your current strategies to reach more students in need?

Perhaps the best way to succinctly put the core of our entire marketing efforts right now is that we just try to meet them where they are and engage them in conversations.

As InvestEd is the pioneer in microfinance for digital natives in the country, we zero in on and try to take advantage of the power of digital to build connection with our intended stakeholders, while also tapping into relations and factors on the ground that influence their decisions, especially when it comes to their education and finances.

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More important than which advertising channels we use, however, are the messages that flow across these media. As much as we can, we try to engage our stakeholders in meaningful conversations to make sure that our products and services are well-suited to their needs. Based on our experience, involving students in the process of value creation reap great rewards—in fact, today, we revel in high referral rates from our Investees who voluntarily share their testimonies to other students who they think could benefit from our services. The confidence they place in us inspires our team all the more to find innovative ways in reaching more students and create bigger ripples that would hopefully create more Investee stories that could echo inspiration even to the most unbankable of our youth.

InvestEd's 2019 goal is...


To grow to thousands of borrowers and ensure the success of all our borrowers! InvestEd is currently the leading student loan company in the Philippines. We've built this reputation because we've always put our students first and have focused on really fixing the 100-year-old problem in hand.

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