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FAQ

Table of contents

  • General

    • 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 like you.

    • What does the name Vittana mean?

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

    • 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.

    • Where are your partners located?

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

    • Why student loans? Why not scholarships?

      Our students don't want a hand-out, 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 actually 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 the amazingly innovative Fundacion Paraguaya and Vittana partner, puts it, "the miracle of microfinance is dignity."

    • Do you offer loans for primary and secondary students?

      No, we do not. 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.

    • 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.

    • Can I contact you for more information about your model?

      Of course. If you still have questions after looking through the site, always feel free to email us.

    • About our students

    • 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 rich uncle to co-sign for you, you just can't go to college. In many cases, Vittana loans are the first and only source of college loans for students in countries where we operate.

    • Who decides which students will appear on Vittana?

      Vittana works together with local microfinance organizations to develop student loan programs and student selection criteria. Through working with a number of microfinance organizations around the world, we’ve begun to understand what makes student loan programs effective and which students are the most likely to succeed. That said, our local microfinance partners and their staff understand their specific clients, countries’ cultures and job markets far better than Vittana ever could. After the initial program has been developed, our local microfinance partner is responsible for selecting the applicants that demonstrate the academic promise and personal drive required to succeed in their education, find work, and successfully repay their loan.

    • How do I know that the 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. However, our local knowledge will never be as strong as that of our partner organizations, who are responsible for assessing the 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 year of college for a few key reasons. Although we know that four-year college produces high returns for students, the drop-out rate is also much higher. Vocational education or the final year of college minimize risk and more importantly enables students to earn significantly higher wages (200-300 percent higher) after completing their degree.

    • Loan logistics

    • I thought I was donating to a charity. Why is Vittana repaying me?

      This is not a donation. 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. Using your loan, the student will finish college, find a job and then repay his or her loan. As the student repays, Vittana repays you. Although we would of course appreciate you re-investing your repayments in another student, we believe that choice ultimately belongs to you.

    • My entire $25 goes to the student. So then how can you afford to operate?

      We fund our operations in two ways. First, when you make a loan on Vittana, we give you the opportunity to make an additional, small and completely optional donation to Vittana help cover our costs. Although this additional donation is in no way required, many people do donate; over time, we are able to pay more and more of our costs through this. Second, we have received generous support from a number of individuals and foundations such as the Peery Foundation, the Mitchell Kapor Foundation and the Crystal Springs Foundation.

    • How do I know these students will repay?

      While repayment is never a 100 percent guarantee, Vittana has taken 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 percent. 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 or, in the case of vocational training, 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?

      Every Vittana student is given the option of a payment-free grace period while they finish school and look for a job. However, some students work part-time while they attend school and are able to earn enough income that they can afford to start making payments right away. Loan officers at Vittana’s partner organizations work with each student to create a repayment schedule that suits his or her needs.

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

      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, our partners usually charge a 10-15 percent annual rate.

      That interest stays with our partners to subsidize their costs, as we do not collect any interest either for ourselves or for our lenders. Not only would the cost be prohibitively high for our students, but we would be unable to continue to operate as a nonprofit organization if we did so.

    • Vittana borrowers receive their student loans before their profiles appear on the website. Why is that? And if that’s the case, how is my money tied to the student to whom I lend?

      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. 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 he will make the first of twelve repayments on a $1,000 loan starting in January 2010, it is our responsibility to ensure that that’s the case in reality as well. 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.

      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 Additionally, lenders like you are, with few exceptions, the only source of funding for the loans made through our partners’ student loan programs (programs that Vittana helps build from scratch). Our partners depend on you to fund the loans that they post to the website, and if they were not confident that Vittana lenders would provide funding, the loans would not be made in the first place.

    • Prospective students and partners

    • Can I become or recommend a Vittana partner?

      We're always looking for partners in new countries to help expand the educational opportunities around the world. We work exclusively with well-established microfinance organizations who have at least 5,000 borrowers, have been in existence for at least 3 years and 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 email us at questions@vittana.org.

    • How can I get a loan?

      If we have a partner in or nearby the country where you live, please feel free to email 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 live outside the United States but would like to come there to attend university. Do you offer loans for people like me?

      We focus on bringing student loans to individuals who were previously unable to attend university or vocational school in their home countries, so we do not offer loans for students hoping to study in the United States. If you are just starting to look for funding, USA Study guide provides a comprehensive list of sources for potential financial aid.