Vittana’s mission is to bring student loans to the developing world through the power of ... More
Vittana’s mission is to bring student loans to the developing world through the power of person-to-person micro-loans. Lend as little as $25 to a student today.
Last updated 14 Oct 2011
Published 14 Oct 2011
The developing world misses out on a lot of what the rest of us take for granted and high on the list of these imbalances must surely be higher education. Vittana is trying to put this right and although currently only a small drop in a large ocean looks to be setting an admirable example with its student loan model.
It’s not that opportunities don’t exist it is the cost that often excludes promising students the chance to further their education. Vittana’s model of linking student loans with crowd funded microfinance is attempting to even things out and is already active in Bolivia, Honduras, Mongolia, Nicaragua, Paraguay, Peru, the Philippines and Vietnam.
The concept is interesting. These countries already have micro finance institutions (MFI’s) that provide low level credit but have little experience of the culture of student loans. As partners of Vittana however they can gain the knowledge and act as the first point of contact for students seeking financial assistance. At the end of the day it is the MFI’s who approve and pay a loan and only after that does it appear on the website and hopefully receive backing.
Short term vocational courses or the final two years of a longer course qualify for consideration and the MFI’s will check on the likely ability to repay and the quality and reputation of the educational establishment involved.
Once the loan details are posted to the site anyone can sign up for an account and contribute $25 -$100 to the loan. As a student starts to repay a loan, individual lenders are repaid on a pro rata basis until it’s cleared. There is no interest attached for Vittana lenders.
With such small individual amounts involved and the lack of interest paid I imagine that the vast majority of these loans end up as donations. Indeed lenders are given three options when they sign up in respect of repayments; take the cash, lend it to another student or donate it to Vittana to help them further the cause.
The phycology at work should ensure any $50 "loan" stays in the loop and why not I say? Any developing country needs an educated population to enable it to develop and Vittana, a fully registered non-profit, is doing its bit to prove that theory.
Anything that helps secure the basic right to a decent education for people who would otherwise struggle gets my vote.