Founded in 2007, GreenNote is an alternative kind of student loan company. As its website states, "Using the GreenNote online platform, students connect with their social network—friends, family, friends of family, community leaders and others—to ask for small student loans. GreenNote helps formalize everything into legally binding loans and handles all the details from loan documentation through repayment." In essence, GreenNote allows students to borrow money from their friends and family and facilitates the payback process.
Below are excerpts from an interview conducted with GreenNote CEO Akash Agarwal in September 2008.
Q: What prompted you to found the company?
A: When I came over to this country from the UK I needed money for school but I did not qualify for loans because I was not an US citizen with an established credit history. I was inspired by Nobel laureate Mohammad Yunnus and the Grameen Bank. They showed the world how small amounts of money deployed to the right people for the right purpose can change lives. They loaned money based on non-credit-based methods. GreenNote is applying this concept to address one of the greatest challenges faced by today’s students—the rising cost of post-secondary education.
Q: How many students have been served by GreenNote?
A: We have thousands of students from over 500 schools across the country who have created loan requests on GreenNote.
Q: How many individual "lenders" have contributed money toward student accounts?
A: We can't give those numbers at this time but have had a very good response.
Q: What happens if students default on their loans? Do the members of their networks lose the money they contributed?
A: It is an unsecured loan. If a student does default on their loan we will report them to a collection agency similar to other student loans.
Q: What key things do students need to know before starting the GreenNote process?
A: Students need to understand that the money for their student loan will come from their friends and family or anyone else that may be interested in helping them.
Students will need to create a compelling profile in which they will need to outline their background and needs. They will then need to identify people who can help loan them the money.
Some things that students need to be aware of is that they do not need to have a co-signer. GreenNote manages the process of collecting and sending the money for the loan directly to the school.
Q: Do you have any recommendations for students who may be asking friends and family for help via GreenNote?
A: The broader the student opens their own personal network of people they think may loan them money, the more likely the student's loan, in full, will be financed. Write a compelling profile that is from the heart. Don't forget a picture as well.
Q: What distinguishes GreenNote from the other social network, student loan companies that are available for students?
A: GreenNote loans are from your friends, family and others who may want to help you. GreenNote does not base the loans on your credit like other lenders.
The people who loan you the money get a return and you get a low-cost loan with 6.8%, similar to the Stafford unsubsidized loan.
Q: Where do you see the company in 5 years?
A: As a key player in helping students finance their college education. An advocate for the student.
