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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Model details2008Not-for-profitLong-term projectLoans to students or familiesAFODENIC- NicaraguaANS- IndonesiaASAI- JordanASKI- PhilippinesBancoFie- BoliviaBinh Minh/ SEDA- VietnamCCT- PhilippinesEduca Pro- BoliviaEmprender- BoliviaFundación CREHO- HondurasFundación Paraguaya- ParaguayIPFE- PeruKingsbridge Finance- GhanaKOMIDA- IndonesiaMicrofund for Women- JordanNWTF- PhilippinesOpportunity International Savings and Loan- GhanaOpportunity KenyaPMPC- PhilippinesSampoerna Foundation- IndonesiaUrwego Opportunity Bank- RwandaXacBank- MongoliaKivaMicrocredit Enterprises10,00041%59%
BeneficiariesOtherMotivated and capable students with financial need and in their last 2 years of higher education
Regional partners use different strategies for targeting students- some will work through the children of existing micro-finance clients and others will go through specific universities.
TechnologyInternetOtherVittana’s website provides the connection between donors and students via online peer to peer lending and crowd funding. Vittana is creating a new website so that students can apply for loans directly through partners on the ground.GoogleOmedia Network
Vittana forecasts their loans will reach 20,000 to 30,000 students by the end of 2013. 23 active loan programs are currently operational across 13 countries.May, 2013
In 2009, Vittana started off with 78 students and a 70,000 USD loan portfolio. Since then Vittana has scaled up almost exponentially (in 2010, Vittana supported 723 students, then 2,139 in 2011, 8,200 in 2012, and a projected 33,000 in 2013) and expanded to 13 countries across the globe. The program has scaled up by focusing on growing their most successful pilot lending projects after the first 1-2 years of operation. Over time, some of Vittana’s partners have begun to target students of higher need by offering loans in their first year of higher education.
Vittana’s goal is to reach self-sustainability by 2015 at $70 million in annual loan volume, reaching 1 million students in total. The non-profit also plans to extend its global reach to Mexico, India, Kenya, and South Africa. In 2013 Vitanna plans to enter a new phase of scaling its existing markets as well as measuring impact through pre- and post-lending income differentials between its graduates and non-participants.
Monitoring & EvaluationYes
Vittana measures the income of its loan recipients post-graduation compared to similar students who did not attend higher education.Internal assessment performanceGraduation or promotion ratesEmployment ratesCost effectiveness/value for moneyNo
Vittana students on average expect to triple their earning power upon graduating from university.
Vittana has a student loan repayment rate of 98%.