FAQ - Table of Contents

• General

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  • What is microfinance?

    It is an innovative way of providing financial services to an oft-overlooked part of the global population. People who fall below the income threshold for the regular services that banks provide still need access to bank accounts and loans, but historically have had limited options for actually receiving them. Microfinance institutions have stepped in to fill that gap.

    While the best-known application of microfinance is issuing micro-loans for individuals or community groups to help jumpstart or maintain a business, Vittana takes that idea and goes one step further – rather than invest in a business, you can invest in a student's potential.

  • What is a microfinance institution?

    A microfinance institution (also known as an MFI) is an organization that gives micro-loans to the community it serves. An MFI can be a non-governmental organization or a regulated bank and provides many of the same services you receive at your local banking provider, just on a slightly smaller scale.

    Vittana works with these MFIs to build sustainable student loan programs funded by lenders and donors like you.

  • Why student loans? Why not scholarships?

    We build loan programs rather than scholarships for a few key reasons. First, student loans are financially sustainable. Scholarship funds are dependent on the original donor, and can only impact one student. A loan made on Vittana can be given to a new student as repayments come in. You can impact 2 – or even 5! – students for the same amount as a scholarship would do.

    The other reason is simply that our students don't want a handout, they want a hand up. A loan enables them to go to school without feeling beholden, and monthly payments provide an easy way to return the money as well as stay engaged. Many of them begin repaying ahead of schedule because they are so personally driven and feel so strongly about being financially responsible. As Martin Burt, founder and CEO of Vittana partner Fundación Paraguaya puts it, "the miracle of microfinance is dignity."

  • Do you offer internships?

    While we are not actively hiring for internships at this time, we are always open to finding great interns. Feel free to email us your resume and a little about yourself and we can go from there.

  • What does the word Vittana mean?

    Vittana is a Telugu word for “seed.” With just a little water and a little love, a seed can grow into a beautiful, self-sustaining living thing; this is what we envision for our students and for Vittana as a whole.

  • How can I verify that you do what you say?

    Vittana is an IRS-registered 501(c)(3) non-profit organization. Our mission is to increase access to education, and we are intensely dedicated to that. If you want to check us out, unfortunately we do not yet appear on most watchdog websites like Charity Navigator or GuideStar, as they require 3-5 years of in-depth IRS filings and public support to be greater than $500,000. In this case, our relative frugality has worked against us, but as we grow we will start to appear on those sites.

    In the meantime, to get an outsider’s perspective we’d recommend you check out some of the articles written about us in the New York Times, Fast Company, and the Economist. Or, feel free to contact us!

  • Can I contact you for more information?

    Of course. If you still have questions after looking through the site, feel free to contact us at any time.

• Becoming a Fellow

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  • How can I apply to be a Vittana Fellow?

    So glad you asked – you can find a comprehensive job description and application instructions for Vittana Fellows on our blog.

  • When should I apply?

    Vittana accepts applications on a rolling basis, so you can apply any time. We also have four major pushes for Fellows each year, the deadlines for which are January 15, March 15, June 15, and October 15. We do, however, place candidates on a rolling basis so it's to your advantage to get your application as early before the deadline as possible.

  • Who is in charge of finding housing, food and transportation for Fellows?

    You are – that’s a big part of the draw of this position. Of course, we provide support during the process, and will also connect you with our partners, who have very good recommendations for local accommodations, etc. But the ultimate choices – both logistical and financial – are yours.

  • Do I get to choose where you send me?

    On your initial application, you have the opportunity to choose a regional preference for where to go. Once you have gone through the interview process, we make a tentative placement based on the needs of our partner, your preferences and your skill set, including language ability. If it is in a location to which you are not willing to go, we will make every effort to be flexible, but be aware that it is not always possible.

  • I would love to be a Fellow, but am only free for 8 weeks. Can I still apply?

    You are welcome to apply. However, Vittana will favor applicants who can stay at least 12 weeks (our stated minimum), and strongly favor those who can stay 4-6 months at a time.

  • How are Fellows compensated?

    Vittana Fellows are responsible for all of their travel and living expenses while in the field. Vittana provides emergency medical coverage for the entire duration of your time abroad, and also offers a small stipend to help supplement travel costs for each Fellow.

• Prospective students and partners

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  • How can I get a loan?

    If we have a partner in or nearby the country where you live, please feel free to contact us for their contact information, then coordinate directly with them from there. If we do not list your country, we do not currently offer loans for students there. Please check back frequently however, as we expand into new countries on a regular basis.

  • I have a friend who really needs a loan. Can I give you his/her name?

    If your friend or acquaintance lives in a country where we operate, we can give you our partners’ contact information for them. If we do not currently work in that location, however, we will not be able to help unless we begin to do so in the future.

  • Do you offer loans to students in the United States?

    Right now, 100 million young people around the world aren't able to access education in any way, shape or form. We are working to change that. There are many fantastic organizations working to improve access in the United States; our expertise just happens to lie in working internationally. As such, we do not offer loans to international students hoping to study abroad, or to American citizens.

  • Where are your partners located?

    We currently have active partnerships in 8 countries – Bolivia, Honduras, Mongolia, Nicaragua, Paraguay, Peru, the Philippines and Vietnam, and are building new partnerships in several other areas of the world.

  • I work for a great organization. Can we partner with you?

    We're always looking for partners in new countries to help expand the educational opportunities around the world. We do, however, work exclusively with well-established microfinance organizations with at least 5,000 borrowers, which have been in existence for at least three years, have audited financials, and have a strong management and financial foundation. If you'd be interested in partnering with Vittana to help bring college loans to students in your area, please contact us.

• Loan logistics

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  • What does a Vittana student loan look like?

    For an in depth answer, check out this blog post: Method to our madness.

    Vittana is the first organization in any sector (education, microfinance, non-profit or for profit) to focus solely on creating education microcredit programs across a global geography; we’re also the first to crowd-fund student loans using our own peer-to-peer platform. That said, Vittana’s most important innovation is the expertise we’ve acquired to create successful student loan programs around the world.

    Although we tailor our model to take into account each individual country’s particular target market and although we work closely with our microfinance partners to make sure we’re constantly improving our strategy, there are a few key ingredients that make our student loan model successful:

    • Vocational education or last one to two years of college. Although we know that a four-year college education produces higher earning potential for students, there is a much higher drop-out risk associated with students with several years of education remaining. Focusing on vocational education and the final year of college enables students to earn significantly higher wages (291% estimated income increase) while also minimizing that risk. Once our partners have developed a track record with these loans, we work with them to offer loans to students who are beginning their college education.
    • Parent or close relative as a co-signer. Unlike traditional microfinance, where loans are often made to a close-knit group of women who promise to guarantee each other's loans, there is no long-term cohort of students that can do this for college loans: students are often more mobile, often leaving their hometowns to attend college and then leaving college to get a job. Having the student's parent (or other close relative) serve as a co-signer is one way to establish accountability for repayment.
    • Interest-only grace period. In countries where there is no IRS or credit bureau, giving a student a loan and asking him to return after he's graduated 12 months later will not yield high repayment rates. Although Vittana itself does not charge interest, our microfinance partners do charge a low interest rate to students. During the educational grace period, our local microfinance partner charges a small interest-only monthly repayment. This monthly repayment helps the student develop a consistent repayment habit and enables our microfinance partner to regularly follow up with the student to ensure good progress.

  • How do I know my money will actually go to the student I chose?

    When our partner organizations approve a student for a Vittana loan, they advance the loan amount to the student and simultaneously create a profile to be uploaded to our site. (All Vittana students, including those who’ve fully repaid their loans as well as students who are currently fundraising, can be found here. Once the student has been fully funded on our website, we transfer the money to our partner organization to cover the advance, and your money is tied to the student to whom you lend through the repayment process. If one of your students misses a payment, Vittana will inform you and you will not receive a repayment that month.

    We encourage our partners to operate this way for two equally important reasons. First, college semesters and vocational programs operate on very specific schedules—if a student is uncertain about when exactly her loan will be disbursed, it is much more difficult for her to meet registration deadlines and plan effectively for school. Second, Vittana is deeply committed to transparency. If a student’s Vittana profile shows that she will make the first of twelve repayments on a $1,000 loan starting in January 2010, it is our responsibility to ensure that this actually happens. Were Vittana to generate profiles using the loan terms requested in the student’s application instead of the terms in his final loan agreement (signed just before disbursal), we would risk displaying inaccurate data.

  • Really? 100% of my loan goes to the students?

    Yep. Really! If you make a $25 loan to a student, the entire $25 is transferred to that student. Neither Vittana nor our local microfinance partners subtract any fee or other surcharge from your loan.

    In some circumstances, our partners offer a line of credit to their students rather than a direct loan. Lines of credit allow students to withdraw funds only when they need to. Typically students withdraw 100% of the funds available to them at some point during the loan term, however on occasion some students may choose not to do so.

  • Do the students pay interest on their loan? How much, and do I receive any of it?

    Vittana does not collect any interest either for ourselves or for our lenders.

    In order to cover the costs of developing and administering their student loan programs, Vittana’s partner organizations do charge students minimal interest. While the rates vary from region to region (the range is from 4%-25%), on average, our partners charge a 10-15% annual interest rate to students. The interest earned on student loans stays with our microfinance partners to help them cover their costs for providing the loans.

  • How does Vittana fund its day-to-day operations?

    We fund our operations in two ways. First, you can donate to help cover our operating costs on our website at www.vittana.org/donate, by gifting a loan, or by adding something extra onto your loan when you check out. Although donations are completely optional, many of our lenders choose to donate their repayments to Vittana or to add a donation as a “tip” onto their loan to help us cover our costs. Over time, these donations and tips will help us fund more and more of our operational costs. In addition, Vittana continues to receive generous funding support from a number of individuals and foundations to cover our operational costs and strategic growth.

  • Is there any guarantee the students will repay?

    While repayment is never a 100% guarantee, Vittana takes a number of steps to ensure the highest likelihood of student repayment. Each of our partner microfinance organizations has a demonstrated track record of high repayment rates, often well above the industry average of 97%. Before disbursing a loan to a student, our partners verify that the student has been accepted to an accredited academic institution and that he or she has a record of strong academic performance. In the case of vocational training, students must have a clear dedication to learning a new set of skills.

    After the loan is disbursed, while the student is in school, Vittana’s partners maintain contact with the student to make sure all is progressing well.

    Finally, most partners require that a close relative co-sign on the loan. It is rare that a student is unable to repay the loan him or herself, but in the case that the student has difficulty making a payment, a parent, grandparent, or spouse will ensure that the student repays on schedule.

  • Why do some students begin repaying sooner than others?

    Each student has an individual repayment schedule that is tailored to his or her needs, and can be as short as six months or as long as three years. Because some students work part-time while they attend school, or because of their families’ support, some can afford to start making payments right away. Loan officers at Vittana’s partner organizations work with each student to help find the best fit when the student initially applies for a loan.

    Every month, as a student makes repayments, we deposit your share of that repayment into your Vittana account. For example, let's say that Anna had originally requested a $500 loan, graduated last month and made her first repayment of $50 this month. If you had contributed $75 (15% of $500) towards Anna's loan, Vittana would deposit $7.50 (15% of $50) in your account this month. We alert you via email when new credit has been deposited into your Vittana account.

    After being repaid, you can choose to either withdraw your funds entirely, re-invest them in another student or donate them to Vittana.

  • Are there any risks associated with lending to Vittana students?

    Vittana closely evaluates partner microfinance organizations for financial health, management strength, social impact and a number of other factors.

    We are confident in our microfinance partners and trust them; we work closely together to build a strong and healthy student loan product that is targeted to work with their particular client base. However, due to reasons ranging from natural disaster to political instability to economic fluctuations, there is risk associated with lending to students in developing countries. Vittana does not guarantee repayment, and a loan made on the Vittana may result in financial loss.

  • How do I redeem my gift card?

    Welcome to Vittana! You can redeem your gift card in three easy steps:
    
    1. Visit the students page and find a student with whom you identify. Click the button to view his or her detailed profile page.
    2. Choose the amount you received in your gift card and click "Lend Now" at the top of the page.
    3. When you check out, click "Have a gift card?" link on the left side of the page. Enter the code written on the gift card you received.

    Your gift card is eligible for a loan until June 1, 2013. Still have questions? Contact us at community.vittana.org.

  • How do I arrange to have my loan matched by my company?

    Corporate matching is a great way to amplify your impact. To find out about your company’s corporate matching policy and how to get your loans matched, contact your HR department.

  • Why do student loans expire?

    Contracts with our MFI partners stipulate that student loans must be funded within 60 days of publishing to our site. Having expiring dates allows our partners to have estimates of their funded loans each month and allows them to mitigate the risk involved with such loans. For further information on loan programs please contact the respective individual MFI partner.

  • What happens when a student expires?

    In extreme cases when a student expires, the money will be refunded to the lenders and the MFI will fund the loan with their own capital.

  • Can I autolend my credit each month?

    Yes, auto lending your credit is easy! The first step is to log into your My Vittana account. In the drop down menu under My Vittana, click “edit my account”. At the bottom of your preferences is a check box for “Enroll in autolend”. Check the box, and save your preferences and your repayments will be auto lent on your behalf!

• About our students

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  • Can’t these students just get a loan from a bank?

    Outside of the United States and a handful of other countries, student loans just don't exist. No matter how well you did in school, no matter how good your grades were, no matter how hard you worked, if you don't have the cash up front or a well-to-do relative to co-sign for you, you can't go to college. In many cases, Vittana loans are the first and only source of college loans for students where we operate.

  • Do you offer loans to primary or secondary students?

    No, we do not, for two reasons. First, you need to be of legal age to take out a loan, which prevents most primary and secondary students from doing so. Second, we focus entirely on providing post-secondary loans because they are almost completely unavailable in the countries where we work and we are deeply committed to increasing access to higher education.

  • Who decides which students receive a loan?

    Vittana works with our MFI partners to create a student selection framework. MFI partners use this framework to determine which students will receive a loan. Our partners have existing client bases; since they already know their clients’ borrowing capabilities, some Vittana partners choose to offer student loans only to the children and family members of their existing clients. Other partners require a minimum grade point average or a letter of recommendation from the student’s school or village leader. In addition, other partners only select students who are studying at one of their approved schools. All of these guidelines are put in place to make sure that the students are set up for a successful experience and that the MFIs select student who are likely to repay their loans.

  • How do I know these students are attending good schools?

    When initiating a partnership in any given country, Vittana’s due diligence efforts include a general assessment of the availability of quality academic and vocational institutions. Our partners also assess the accreditation, academic reputation and general quality of each university, college, or training center attended by their student borrowers.

  • Why is the educational period so short?

    We focus on short vocational programs and the last one to two years of college for a few key reasons. Although we know that four-year college produces high returns for students, the drop-out rate for freshmen and sophomores is also much higher. Additionally, we want to ensure that our students are able to afford the loans they take out. Vocational education or the final two years of college minimizes risk, and more importantly enables students to earn significantly higher wages (291% estimated income increase) after completing their degree. Since student loans are so new for most of our partners (and students), we first want to create a successful track record. Once that is in place, our partners will be able to confidently expand and offer longer-term loans in the future.

• Troubleshooting

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  • If I live outside the USA, can I still make a loan?

    Absolutely! We welcome lenders from all parts of the world. As long as you have access to PayPal, you can make a loan on Vittana.

  • Can I use a credit card or my PayPal account to fund a loan?

    You can use one of any number of payment methods to make a loan or a donation on the Vittana website. We accept every major credit and debit card, or you can choose to use your PayPal account. Vittana uses PayPal to process all transactions on our website to ensure that your information is kept completely safe and secure.

    If you are interested in using an alternate payment method (for example, check or stock donation), please contact us directly at contact us.

  • Am I making a loan or donation?

    You can do either on our site. To make a loan, go check out our Students page and find a student with whom you identify, and click “Lend now” on his or her page. Although you cannot earn interest through Vittana, when you support a student through Vittana, you are making a student loan – not a donation to a scholarship or a child sponsorship. This option is not tax-deductible, and you should expect to receive regular repayments via Vittana Credit from the student you selected as he or she pays back the loan. Although we would of course appreciate you re-investing your repayments in another student, we believe that choice ultimately belongs to you.

    Your other option is to donate directly to our operations, or gift a loan. You can also add a “tip” onto a loan to help cover our operating expenses. A donation is tax-deductible in the United States (sorry, all you international users – maybe someday), and it is considered final, so you will not receive repayments via Vittana Credit for your contributions.

  • How do I get my repayments?

    As Vittana receives repayments from our partners, we send out repayments via Vittana Credit each month. Once you have a balance of $10, we will send you an email notification about your Credit. You can choose to continue to let it accrue, re-lend it, or withdraw it at any time.

    If you choose to re-lend it, you can easily find a student to support and when you reach the checkout page your Credit balance will automatically deduct from your total loan or donation.

    You can also always view the balance of your Credit by logging into your account and clicking the “Profile” button in the top right-hand corner of your screen.

  • I would like to withdraw my Vittana Credit, but can't figure out where. How do I do it?

    Withdrawing your Vittana Credit is a simple process. Log in to your account, then click on your “Profile” in the top right-hand corner of the screen. There will be four green links across the top of the page – click on “Vittana Credit.” A full accounting of your Credit shows on this page, and there is a white button in the middle of the screen that says “Withdraw.” Follow the instructions from there, and we will send you your requested amount within 7-10 business days.