In 2013, Manu Smadja received an email from a desperate junior at his alma mater, the University of Virginia. The mechanical engineering major was $500 short on rent and about to get evicted, which would force him to drop out. In a last-ditch effort, he emailed Smadja asking for help.
Smadja was stunned that so much talent could be squandered for $500. “It just rocked my world,” he says. But the dilemma also reminded Smadja of his own situation as a French international student, when he was constantly stressed about his finances and doing odd jobs to scrape by. Smadia, then a consultant at global management firm McKinsey & Company, sent the mechanical engineering student the rent money. But then a light bulb went off. “I thought, ‘How do we solve this on a systemic level?’ ”
Immigration reform is fundamental to my company.
His answer was MPOWER Financing. The company, founded in 2014, helps talented international and underprivileged American students secure educational loans. Today, MPOWER Financing, based in Washington, D.C., is a preferred lender at multiple Ivy League schools, offering students a paperless path toward obtaining a loan decision within three days. Smadja fondly recounts the many calls of gratitude the company has received, like one from a young international student from Kenya who spoke through tears, thanking MPOWER for a loan that allowed her to complete her Harvard degree.
Smadja makes clear that his startup is not a charity. “We’re making a good profit,” he says, adding that the company started three years ago with “just two guys” and now has grown to a company with 21 employees, 14 of whom are U.S. citizens, and many contractors. MPOWER thrives and profits from the gaps left by the traditional banking industry. “It’s a sound business,” he says, noting that all the students they choose show high potential. “We make money and we’re helping these students at the same time. It just makes so much sense.”
MPOWER aims to make $100 million in loans to talented domestic and international students in the U.S. in 2017, and says its long-term vision is to become “the non-bank for global citizens.” However, our country’s broken immigration system stands in the way of Smadja’s ability to hire his pick of employees; he has had to turn away many qualified professional candidates because the process of getting the proper visa documentation “is complicated and expensive,” he says. Smadja has tried finding top technical and analytical talent in the United States, but there is a significant shortage. “Even when technical and analytical resources are available, to get these resources, you’re competing against companies like Facebook who’ll pay six figures for computer scientists right out of college,” he says. “As a result, we have an offshore software development team and we have to devote a significant amount of resources to hire and retain the remaining analytical talent in the U.S.”
Additionally, MPOWER wants immigration reform because it impacts the company’s bottom line. “If tomorrow you tell me that these students are going to have easier access to visas or there is going to be a bigger number of visas available, that changes the economics of our business and makes MPOWER even more appealing,” says Smadja. Immigration reform increases the employment prospects of his borrowers, many of whom are bright international students struggling to find employers to sponsor their post-graduation visas. Reform would help Smadja’s return on investment, strengthen his business, and allow it to contribute more robustly to the U.S. economy. “Immigration reform is fundamental to my company,” he says.