A lending platform is a good idea. I think that the most difficult part in the implementation of the idea is who you will manage collaterals. If you do it successfully and you eliminate scammers, then Good Job!
Totally agree with your point. Educational loans have low defaults when you compare personal or credit cards. Online lending platforms like Lending Club and Kiva was reporting 10% in the beginning and eventually decrease to 2-5%. We are hoping the same.
Few ways we are protecting investors investment is by signing legally bindable documents. If a lender is deliberately defaulting his loan then we can take legal action against him.
But the true challenge is not the above part. The challenge is to understand when a student is going to default. The economic circumstances across the world are constantly changing. These changes often feed into changes in the payment behaviour of borrowers. Tracking these changes are key to ensuring a consistent risk management framework is applied over time. In summary, in order to effectively manage the credit risk, the focus will be on systems, data and reporting capabilities. This will enable us to build and maintain accurate SPQ's (Student Performance Quotient) and limit losses.
Thank You