Vittana is the pioneer provider of digitally crowd-funded microloans to students in the developing world who could otherwise not afford higher education. It partners with on-the-ground microfinance institutions to jumpstart the market for lending to low-income students.
2008BoliviaUnited States of America

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Vittana provides microloans, mostly generated by small donations from individuals on its website, to students in developing countries who could otherwise not afford higher education. There are 100 million young people worldwide who have no way to access either universities or technical schools because they are unable to secure financing; Vittana recognized this gap and stepped in to fill it in 2008. Over the past few years, VIttana has exponentially scaled its model and expanded to new countries: 78 students were supported in 2009 and 33,000 are projected to received support in 2013.

However, Vittana does more than connect donors and students. What makes the model unique is Vittana’s support of microfinance partners on the ground to jumpstart student loan markets where they would otherwise not exist. Vittana identified three reasons why financial institutions in the developing world largely fail to finance student loans: high risk, lack of experience, and lack of capital. Vittana breaks these bottlenecks by providing its regional microfinance partners with free technical assistance, student-loan specific training, and interest-free capital generated from their website.

To minimize the risk involved and allow for “smart growth,” Vittana begins each new lending program as a pilot of 100 to 500 students. The portfolio of loans can grow after year 1 or 2 if the program is successful. The loan pool is limited to students in the second-lowest income quintile (the bottom 20-40%) who have family members that can co-sign the loan. Finally, Vittana generally funds students in the last 2 years of their educational program, with an average loan amount of 750 USD (about a year of full coverage of educational costs). On-the-ground partners choose applicants based on the criteria mentioned above, as well as ability and ambition. 98% of Vittana students repay their loans and are expected to triple their earning power after graduation.

Vittana expects to pursue even loftier goals in the future by expanding to new countries, new partners, and perhaps students from the bottom quintile. By 2015, its goal is to reach one million loans and self-sustainability.

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