Mpower Financing, a US lender specializing in loans to international students, has largely shut down after losing access to financing. The company relied heavily on borrowers from Zimbabwe, which was added to a partial travel-ban list, making it vulnerable to policy shifts. Mpower used warehouse financing, including a credit line from Deutsche Bank AG, to fund loans before selling them as asset-backed securities (ABS). When demand for its ABS dried up after the restrictions took effect, the funding cycle broke down. After cutting most employees, including founder and CEO Manu Smadja, Mpower canceled its quarterly shareholder call and warned equity investors they were likely to be wiped out. The company has over $400 million of outstanding ABS and is now in talks with creditors.
The policy changes severely limit the total addressable market of students the company can serve, according to a letter from Chief Legal Officer James Breheny. A skeleton staff continues to handle remaining obligations. Mpower grew to more than 25,000 borrowers across over 150 countries since launching in 2014. However, its focus on African borrowers, particularly from Zimbabwe, was deliberate to cut costs compared to competing for Indian and Chinese students. A March provisional credit rating report from Morningstar DBRS showed that over a third of the loans in a proposed ABS led by Goldman Sachs Group Inc. were from Zimbabwean borrowers, compared to 13% in a 2025 deal and less than 5% in a 2024 securitization.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing