Fintech startup Skolafund aims to help underprivileged students
By Lum Ka Kay December 15, 2015
- Bringing trust and simplicity into the process of helping those in need
- Aims to raise US$250K in seed round to enhance platform and go regional
NO-ONE should be deprived of educational opportunities – but sadly, not everyone can afford it. It was with this in mind that Malaysian startup Skolafund was founded by a team of undergrads.
The financial services technology (fintech) startup aims to help underprivileged students pursue higher education via crowdfunding, through its financing platform, in a peer-to-peer (P2P) lending model.
It started when one of its cofounders checked out his university’s unofficial Facebook page, and came across many students posting anonymously, sharing their struggles and concerns over their financial situations, according to Skolafund chief operating officer Syakir Hashim.
“And what was surprising to us were the comments made on this kind of posts by other university students, alumni and staff – they were all asking for the students’ bank account numbers via personal message so that they could fund their studies,” he told Digital News Asia (DNA) via email.
“We saw this as an opportunity to bring simplicity and trust into the process of giving underprivileged students access to quality education,” he added.
Since its web platform went live in April, Skolafund has disbursed 14 scholarships worth RM50,000 (US$11,528 at current rates) to underprivileged students who had been struggling to fund their tertiary education, he claimed.
Financial aid for students has become a key issue, with the Malaysian Government slashing its allocations to tertiary institutes in Budget 2016.
The national budget allocated RM13.378 billion for higher education next year, a drop of RM2.4 billion from last year’s budget, The Malaysian Insider reported. [RM1 = US$0.23 at current rates]
In situations like this, it is paramount that aid goes out to those in real need. To ensure the legitimacy of the applicant, Skolafund collects copies of the student’s matriculation card, university’s offer letter, and parents’ payslip or tax returns.
“Through our verification process, we ensure that the applicants come from a less-privileged family who fall below the average household income in the country,” said Syakir.
In Malaysia, the average monthly household income for 2014 was RM6,141 (US$1,416), according to a recent report by The Star Online.
To further tighten the verification process, Syakir said Skolafund also ensures that the bulk of crowdfunded scholarships or tuition fees are paid directly to the universities.
“This lowers the risk of fraud. However, we are also working hard to introduce more features to bring in more trust and reduce the risk of fraud,” he said, although he didn’t elaborate.
Once a student’s application to raise funds has been approved, the student gets to set the amount he or she needs to raise at the beginning of the campaign. If the crowdfunding campaign doesn’t meet the target in 30 days, the money will be refunded to the respective sponsors.
Skolafund charges a 5% processing fee for each successful scholarship campaign.
The challenging path
According to Syakir, running Skolafund has been a challenge, what with he and his three cofounders being undergraduate students themselves.
“Right now, as students ourselves, it is tough to bootstrap our business while maintaining good growth.
“Also, fundraising has been quite challenging – I feel that there is a gap in early stage funding for impact startups,” he said.
“Nevertheless, we will keep going as we believe in Skolafund’s mission to democratise university education and enable all students who qualify for university education to complete their studies,” he added.
The cofounders had to tap into their own savings to grow Skolafund, said Syakir.
As one of the fintech startups that took part in the recent Startupbootcamp FinTech accelerator programme, it received pre-seed funding of S$24,500 (US$17,331).
Skolafund is also in talks with Malaysian and foreign investors to raise a seed round of US$250,000 to enable it to enhance its platform and go regional.
“We wish to establish a strong regional presence in South-East Asia beginning with Malaysia, then Indonesia and Singapore,” said Syakir.
He said Skolafund will be seeing more campaigns and sponsorship drives over the next six to 12 months.
The startup is also working hard to launch a new service called ‘Skolaship.’
“Skolaship is a service that enables anyone – from members of the public to small and medium enterprises (SMEs) and philanthropic organisations – to create, manage and disburse their own scholarships on our platform,” he said.
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