In 2022, “ISA” were launched for the first time in Italy with the aim of providing financial support for education, based on the “pay for success” principle, and promoting the employability of young talents.
What are Income Share Agreements?
Income Share Agreements (or “ISA”) are an “investment” financial instrument, already established in Anglo-Saxon markets but not yet widespread in Italy, that allows students to obtain the resources needed to attend training programs. In return, they commit to repaying a fixed percentage of their future income only if they secure employment, up to a maximum repayment amount set in the contract. This is not a loan, but rather a true investment in the student, sharing the risk associated with their professional career.
The “Pay for Success” model and differences from a bank loan
Unlike traditional bank loans, ISA represent an innovative financial support tool for students based on the “pay for success” model. They enable young talents to access resources to enroll in specific training programs, with repayment conditional upon securing employment. Once their studies are completed, the student agrees to repay a small portion of their income for a limited period (approximately 48 months) and in any case up to a maximum agreed amount. If the student doesn’t find employment or if their income falls below a predetermined minimum threshold, they are not required to repay the capital received, unlike a traditional bank loan.
The first pilot program in Italy
In Italy, the introduction of this instrument was carried out by Talent Services S.r.l., an innovative start-up founded in Milan and specializing in data-driven solutions for education, as well as financial instruments supporting the training of high-potential students. Operating under the name Talents Venture, the company provides consulting services to universities and public and private institutions. Thanks to a total commitment of approximately €1.5 million from Fondazione Cariplo, Fondazione Social Venture Giordano Dell’Amore, Fondazione Italiana Accenture, Fondazione Vodafone Italia, and Fondazione Generali – The Human Safety Net, in 2022 it launched Italy’s first crowdlending platform applied to the education sector.
Target audience and results achieved
Through the use of Income Share Agreements (ISA), the platform facilitates access to educational pathways for high-potential students aged between 20 and 35. More specifically, it targets individuals in economically and financially vulnerable situations who wish to enhance their skills, particularly in web development, cybersecurity, data analytics, and digital marketing. To date, the Talents Venture platform has disbursed €1.7 million, supporting 536 students and involving 10 training institutions. Furthermore, 117 students have already repaid or are currently repaying the amounts received.
