GreenNote
Higher education crowd-funding site enabling students to reach out to their social network for donations.
| Date | Investors | Amount | Round |
|---|---|---|---|
| investor investor | €0.0 | round | |
N/A | Acquisition | ||
| Total Funding | 000k | ||
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GreenNote was a peer-to-peer lending company that positioned itself at the intersection of social networking and educational finance. Founded in 2008 by Akash Agarwal, the company emerged during a period of tightening credit markets, aiming to provide an alternative funding source for college students. GreenNote's model was not to lend money directly, but to facilitate and formalize loans between students and their personal networks, including family and friends.
The platform allowed students to create online profiles detailing their educational aspirations and financial needs. Lenders, typically from the student's own community, could then pledge amounts as small as $100. GreenNote managed the backend of these transactions, creating legally binding agreements, handling tax documentation, reporting to credit bureaus, and disbursing the funds directly to the educational institution. This structure eliminated the need for traditional credit checks or co-signers, as the lending relationship was based on personal trust rather than credit history. The interest rate was set to be comparable to the Federal Stafford Loan rate at the time, which was 6.8%.
For its services, GreenNote charged a 2% fee to the borrower and a 1% management fee to the lender. The company's objective was to tap into the collective financial power of personal networks to make student loans more accessible and efficient. Despite its novel approach, the one-to-one lending model proved challenging to scale. In March 2009, less than a year after its official launch, GreenNote was acquired by TuitionU.com, a student loan portal operated by Cology Inc. The acquisition was viewed as a purchase of GreenNote's technology platform, with the intention of integrating it into TuitionU's broader network of lenders, which included credit unions and potentially foundations and corporations.
Keywords: peer-to-peer lending, student loans, microloans, social lending, education finance, P2P loans, community lending, Akash Agarwal, TuitionU, Cology Inc, student financing, family and friends loan, online lending platform, loan formalization, alternative loans