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Akash Agarwal
Founder & CEO
GreenNote
June 2008
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Agarwal attended the University of Kent at Canterbury, UK and graduated with Honours and a Bachelors degree in Computer Science in 1990. He arrived in California in 1994 as a product line manager for Oracle. In 1996 he entered Harvard Business School and earned his MBA two years later. He has been successfully involved in software-related startups since then. His latest is a micro-loan company with a do-good component for college students.
What is micro-finance?
It is a way of providing small amounts of capital to people who can use it effectively. The amounts vary from country to country.
How is GreenNote applying micro-finance principles to student loans?
We provide the ability for students to seek loans from their friends and family in sums as small as $100. They get rates of return slightly higher than with savings deposits. They also get the satisfaction of helping someone they care about pay for college.
Who are the people who participate as borrowers, and why?
They are undergraduate students and graduate students who can benefit from a lower-cost option after they have a Stafford loan - at virtually the same interest rate. The up-front fee is 2 percent or $49, whichever is greater. Those attending community colleges and trade schools may very well be able to finance their entire unmet need with GreenNote. Students attending a more expensive school appreciate the opportunity to bridge part of the gap with relatively inexpensive financing.
Who are the people that respond as lenders, and why?
Most often they are family and friends. There is a potentially wide variety of other interested parties. For example, alumni and alumni networks are good candidates as lenders to students.
What terms are typically found in GreenNote promissory notes?
The interest rate is fixed at 6.8 percent. Repayments may be deferred up to five years while in school, and then the repayment term is ten years. No co-signer is required. We will report to credit bureaus regularly.
What should a college president know about micro student loans?
Social network-based lending is an excellent way to expand and then utilize the social networks of students, and consequently the school. The uncertain student loan environment today makes GreenNote's timing excellent for this fall.
What should a campus financial aid officer know about micro student loans?
He or she should be glad to have a new relatively low-cost option for students with a funding gap after they have their federal loans. And this option comes without co-signers or minimum credit scores.
Should a commercial lender fear GreenNote?
Our loans are an alternative, not a substitute. Time will tell.