Transform your future potential into present capital - Postpay education with Income share agreements

We provide more youth with fair educational opportunities and career advancement without being blocked by cost thresholds.

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Eligibility

  • Yes, I fulfill all of the eligibility criteria.

Initiative's representative name

Yoon Seok, Jang

Initiative's representative date of birth

1988.08.21

Initiative’s representative gender

  • Man

Which eligible market are you based in?

  • South Korea

Where are you making a difference?

Same

Website or social media url(s)

https://www.hakdokman.com

When was your organisation founded?

KST 03/2018

Focus areas

  • Helping people adapt to technologies of the future
  • Financial skills and capability
  • Reskilling and upskilling the workforce

Project Stage

  • Start-Up (first few activities have happened)

Yearly Budget: How much capital do you need to accomplish your proposed project?

  • $500k - $1m
  • $1mil - $5mil

Organisation Type

  • For-profit

1. Founding story: Share a story about the "Aha!" moment that led the founder(s) to get started or the story of how you saw the potential for this to succeed

We have a highly competitive society. Korea is known for a fierce competition to enter college. And that competition costs a lot due to private education such as tutoring. So, many of high level college students are doing tutoring part-time job for their tuition or other expenses, and Mr. Jang was one of them. Quickly, he caught up with one question. 'What if you don't have enough money for better education? Do they really deserve a lower achievement because of their financial shortage?' Mr. Jang does some research of his own and shocked by how much education and social achievements are correlated, and how severe Korea's polarization is. Soon he start to build a system for post pay tutoring service. That became a seed of our company.

2. The problem: What problem surrounding employability or financial capability are you helping to solve?

Income gaps make a huge difference in learning opportunities, which directly affects job choices and future income. It's getting serious that polarization is growing. And most young people are classified as 'thin filer's, so they do not have many financial options for provide to their education and vocational training, despite being encouraged to learn new skills faster and faster.

3. Your Solution: How are you planning to solve this problem? Share your specific approach.

We provide post pay vocational training. By adopting Income Share Agreement, we are trying to offer more educational opportunity and broader financial choices to Korean youth. ISA(income share agreement) is a type of financial contract that we provide some education to a customer who, in exchange, agrees to pay back certain percentage of their future income for a fixed term or count. We encourage to believe that youth's success will soon equates investor's(including partner academies and post paid instructors) success, youth's success will directly equates society's success through ISA model. Because pricing based on ISA, tuition is linked with customer's income and employment status.

4. How are you innovating or using unique approaches to solving the problem?

We always think about making 0 to 1, trying to do something never done before in the mainstream logic. Our main customer is young people. They are untrained, immature, and at high risk for investment. So the mainstream says. We don't. We saw young people as next mainstream. They are willing to learn, growing, and their value is increasing day by day. If you believe that your society would last, why don't you invest in young people. To make our ISA education model more persuasive, we captured the importance of data. Over 2,000 people took our classes. 70% of students got their wanted job or reached to the goal, and the default rate of our bond is only 0.3%. Now we have massive and meaningful data that proves post pay education works.

(Instructions for questions 5 and 6, no answer required) Please only answer the question (5 - “employability” or 6 - “financial capability”) that applies to your organization’s topic of work (see below for definitions)

6

6. Financial capability: how is your organization or project creating innovative solutions that arm people with ability to optimize their current and future financial health

Represented by ISA model, our post pay education does no harmful or negative effects to young people’s credit, but surely reduce their financial burden of preparing for the social advancement. Our service is not based on loan system, but we encourage our customer to schedule their upcoming repayment, and visualize plan for future income by career choices.

6a. Please describe what aspect of financial capability your organization is focused on fostering and how you have measured / plan to measure progress.

We are building a new credit standard for the people who is classified as 'thin filers'. Focusing on accumulation and interpretation of ISA reimbursement data, we will develop a alternative credit rating system that will redefine 'thin filer''s financial health and possibility.

7. Marketplace: Who else is addressing the same problem? How does the proposed project differ from these approaches?

There are some renowned companies such as Edly and Lamda. We are developing Korean version of post pay education & edu-fin. Edu-fin is compound of education and fintech. We are trying to lower the financial threshold of learning. Through empowering young thin filers' financial capability, we make our society healthier.

8. Impact: How has your project made a difference so far?

Over 2,000 people took our classes. 70% of students got their wanted job or reached to the educational goal, and the default rate of our bond is only 0.3%. At the very beginning, there were high school students who want to go to better college, now there are broader young people who wants to start a better career. We have 9 institutional partners play key roles in 4th industry fields.

9. Financial Sustainability Plan. Can you tell us about you plan to fund your project and how that plan will be sustainable in the short, medium, and long term?

Due to the nature of the ISA model, it takes about two years to recover the education costs. Based on the data we accumulated, the impact of our business model is clear, but surely survival itself is challenging to us. First, we are planning more classes. After about 2 years, the costs of the education will begin to recover. We aim to complete and upgrade the alternative credit evaluation model till then, and start P2P microfinance for thin filer. Ultimately, we hope to develop a business model with educational and financial support that will help more people to prepare for a better future.

10. Team

It is composed of 3, operation team, tech team and design team. There are 15 of full-time members and 3~4 occasional interns or part-timers. We organize 'cell's by project, and place team members as needed to achieve a goal. It is recommended that employees be empowered and resolved autonomously. We value over-communication and transparency, so that we can trust and encourage each other to reach our goal. Members are prepared to learn and work for any newer solution that company pursues.

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