Social Issue

Tertiary education is a very powerful way to promote social mobility, yet underprivileged students often find it hard to secure the funding for their university education, thus perpetuating poverty cycles.

In Mexico, Colombia, Peru, and Chile, university enrolment in the lowest income quintile ranges from 8.5% to 20%, compared to 50% to 93% for the top income quintile. Lack of financing has been attributed as the main reason for this difference. On average, around the world, a person with a degree earns three times the income of a high-school graduate and up to ten times more in Latin America.

Our Response

Lumni brings social investors and students together by designing and managing funds that finance university education of underprivileged students in Mexico, Colombia, Peru, and Chile. Over 80% of their students are the first person in their families to go to university.

Lumni’s business model is that of an asset manager, where they charge fees to investors for structuring and managing funds and also derive some fees from students in the form of commitment fees. The fund’s returns are based on students paying back a fixed percentage of their income (usually 10-15%) over a determined number of years once they have secured a job after graduation.

Expected Social Impact

The long-term benefits of being the first in a family to study at university cannot be underestimated: they will be a role model for their siblings and other members of their community, as well as being in a much better situation for financially supporting their family in the future.