"They kept telling us never to lend to the poor, because they would never pay their loans"
Carmina Bayombong, the CEO of youth development programme InvestEd, tells us how she wants to end college dropouts in the Philippines, and how being part of the Cartier Women's Initiative programme changed her life.
Carmina Bayombong knows how difficult it is for the average Filipino to attain a college education. Bayombong's parents struggled to pay for their degrees due to poverty: her mother, who was one of ten children, managed to finance her degree through scholarships. But Bayombong knows that she was an outlier, and that many more youths in the Philippines — who often drop out due to poverty or teenage pregnancy — are not as fortunate. "The odds are stacked against these students," says Bayombong. "Despite our excellent repayment rates, most people are hesitant to lend money to students, many of whom need just P35,000 (S$910) to graduate. Despite working many part time jobs, this is still an impossible sum to raise for many."
That's why Bayombong wanted to set up InvestEd, a development and lending programme to help youths pay their way through college, and to set them up for a successful career after graduation. What she didn't expect was how resistant industry experts would be to her idea. "They kept telling us never to lend to the poor, because they would never pay their loans," she says. "What was most painful was being told not to lend to women, because they will get pregnant and not pay their loans."
This pushback extended beyond her idea, extending to Bayombong herself: "Minority women are constantly asked by funders if we plan to have a family," says the 28-year-old. "We are constantly being told to raise money from friends and family first — but most female entrepreneurs in developing countries don’t have rich friends and family."
That changed when Bayombong applied for Cartier's Women's Initiative in 2018. Bayombong became a Laureate of the programme in 2019, and last year, won the programme's Impact Award. The prize, which includes grant money and human capital support, also allows Bayombong and her fellow awardees access to a diverse network of fellow impact entrepreneurs. Since the Initiative's inception in 2006, it has supported 262 female change makers from 62 countries, and has awarded some $6,000,000 in prize money.
Here, Bayombong talks about why the future of young Filipinos is often "a game of odds", how she wants to end college dropouts in the country, and how the Initiative "transformed" her life.
How did you come to know of the Cartier Women's Initiative, and what made you apply?
I remember I was 23 years old and pitching my holistic idea of educational loans that included coaching and counselling to six banks, and everyone told me that it’s crazy, that there’s no real successful company that was doing what I proposed — that it just doesn’t exist.
Then I came across the Cartier Women’s Initiative in 2018. I was just starting out and had subscribed to a lot of grant portals and it popped up there. What drew me to the programme was all the super inspiring women who were supported by Cartier, and their stories really resonated with me. I thought, if I could just meet these women — even without winning or getting grant money — that was going to be such a privilege. I didn’t feel ready for the program. Instead I focused on my dream of education innovation, rather than whether I was going to be accepted or not into the program. I was so surprised to be shortlisted as a Fellow, and when I was named Laureate, I couldn’t believe it. The Cartier Women’s Initiative had transformed my life.
What were some of the most helpful aspects of the programme?
Leadership development really stood out from my experience. The CWI has been very helpful in guiding and empowering the women in our team. We all face the same challenges, like imposter syndrome, and overcoming challenges in our personal and work lives. Additionally, the programme has helped me understand the unique problems of our customers and how to develop products that can benefit them: at InvestEd, for example, one of the top reasons for dropping out of school in the Philippines is teenage pregnancy. I got to know the challenges faced by single mothers applying for our financing program and was able to adapt our business to cater to their needs.
What was the 'eureka moment' that made you want to set up InvestEd in the first place?
My InvestEd journey actually started since I was young. Both my parents struggled to get their college education due to poverty. My mom had nine siblings and farmers for parents, and paid for her degree through scholarships. I remember asking her why she gave loans to people she didn't know. She told me this gave people the opportunity to succeed, and when I struggled to get InvestEd off the ground in 2017, my mom became the first investor of InvestEd when she took out a big chunk of her retirement savings for my business. Due to the lack of financing options, a lot of my peers in college had to work part-time jobs on top of the heavy academic workload to get through, so their experiences also strengthened my resolve to finance the education for those who need it most.
Each of InvestEd's study-now-pay-later loans is packaged with an online “Success Loan Program”, where an InvestEd education-to-adulthood coach will guide the student borrower towards job security and financial freedom through training in subjects such as employment, financial literacy and entrepreneurship.
What are some success stories from InvestEd that still stay with you today?
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. What was most painful was being told not to lend to women, because they will get pregnant and not pay their loans! We did the exact opposite. Today, we are lending to students coming from families living on less than US$2 (P103) per day. More than half of the people we lend to are women. While many of them did get pregnant, everyone is paying their loans. InvestEd first started by providing small loans of P12,500 each to 12 students in one university. Today, we have served more than 2,000 students from 400 schools. Today, we have a 100 percent repayment rate.
You said in a separate interview that the future of young Filipinos is 'a game of odds'. What did you mean by that?
Philippines is part of the developing world, where there are around 500 million youth who can't access higher education. Despite our excellent repayment rates, most people are hesitant to lend money to our students, many of whom need just P35,000 to graduate. Despite working many part time jobs, this is still an impossible sum to raise for many. The odds are stacked against them, because if we don’t get the wealthy at the top one per cent to care about this problem and take a risk, we are not able to convince majority of our students, who belong to the bottom 40 percent, to take on a risk-free loan so they have a chance at a better future.
95 per cent of the time, nobody wants to risk lending to our students. 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. Lending to students in poverty is a patience game, and I think it takes time and awareness to change mindsets. We started with loans to 12 students in their last semester from lenders who simply believed in the idea of a more sustainable financing program. After a successful pilot, we were able to expand to more students. It’s this proof that gets more people to believe in what we can do.
As a young woman running a philanthropic start up in the Philippines, what challenges did you face?
The first challenge was facing big visions in low-resource contexts, and how this leads to depression and severe burn out. Typically, no one is funding in the Philippines because there are few success stories, and it’s too risky. But that’s why there are no success stories: because there’s no funding and resources in the country. How many people have quit because it was just too difficult? How many promising models were discontinued because all the funding were from English-based grants and pitching competitions: how can non-native English speakers compete, especially for those who don’t have money for pitch coaches?
The second challenge was how funding continues to elude us because of who we are: not just as females, but as minorities too. Being consistently asked by funders if we plan to have a family. Being constantly told to raise money from friends and family first — but most female entrepreneurs in developing countries don’t have rich friends and family. Female minority impact entrepreneurs often come from middle class families at best. We don’t have the monetary resources to up-skill ourselves and foster connections we need to effectively achieve our mission.
What would you say is your ultimate goal with InvestEd?
Since I started InvestEd, we have assisted and served 2,000 students. We have an ambitious goal to end college dropouts in the Philippines in five years. Being part of a global community of women impact entrepreneurs has showed me that it’s possible to make an impact, one student at a time. It takes time, but as our community grows, we can provide more support, pave the way, and inspire other women to pursue their own dreams.
