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How it works

In most countries, student loans just don't exist. The Vittana community is enabling students around the world to get access to higher education for the first time.

When you make a loan to a Vittana student, 100% of your funds go to the student. Using your loan, the student finishes college (or vocational school), gets a degree and then gets a job. When the student repays Vittana, Vittana repays you the full amount of your loan — if you lent $25, you are repaid $25. Make a loan today.

What we do

Vittana partners with local microfinance organizations around the world to build student loan programs from the ground up, often providing the first and only access to college loans in the countries where we work.

Then people just like you come together on the Vittana website to lend $25 and $50 at a time to individual students around the world, empowering them to finish college and take a giant step forward in

their lives. Outside of the United States and a handful of other countries, student loans just aren't available.

Learn more about our mission and what we do.

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Developing student loan programs

In collaboration with microfinance organizations around the world, Vittana has developed and proven the foundations of a model to bring student loans to developing countries. The expertise and engine to develop strong, successful student loan programs is one of our biggest contributions to the field of microfinance.

Broadly, here are some of the things we know that make this student loan model successful:

  • vocational education or last 2-3 semesters of college. Although we know that 4-year college 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 (200-300% more than before) while also minimizing that risk.

  • children or close relatives of current microfinance borrowers. Families who have been able to access microfinance loans and built micro-enterprises tend to have an economic and life foundation that allows the next generation to think about higher education and be well-prepared to handle the responsibilities of credit.

  • mother 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 mother (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 neither the Vittana organization nor Vittana lenders charge interest, our microfinance partners do charge a low interest rate. During the educational grace period, our local microfinance partner charges a small interest-only monthly repayment. This monthly repayment helps the student develop a regular repayment habit and enables our microfinance partner to regularly follow up with the student to ensure good progress.

When Vittana identifies an innovative microfinance organization that is interested in providing student loans to its customers, we work closely with the organization to develop the new product, create eligibility and follow-up criteria, train staff, and bring the product to a fully operational status. It usually takes us 3-6 months to bring student loans into a new city or country.

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Making a loan

There are a few behind-the-scenes steps that make the Vittana lending process function smoothly. Under normal circumstances you won't be aware of most of this but we think it's pretty interesting to see what goes into making the system work:

  1. Students apply to our local microfinance partner for a college loan. Our microfinance partner evaluates them to verify past academic achievement, enrollment in an acceptable college or vocational program, and employment prospects.

  2. If the student's application is accepted, our microfinance partner disburses the loan and uploads a profile and photo to Vittana. After any required translation or editing, the profile then becomes visible on the web.

  1. At this point, you are able to browse that student's profile on our website and, if you so choose, make a loan to him or her. By supporting this specific student, you are directly investing in his or her education. You will receive regular progress updates and be directly repaid by the student you choose.

  2. After a student's loan is fully funded, Vittana readies that loan for transfer to our microfinance partner. To minimize administrative and transaction overheads, Vittana aggregates loans for all fully-funded profiles and transfers them on a pre-determined day of the month to our microfinance partner.

  3. Using your loan, the student attends college, graduates and gets a degree within 12 months. In some cases, the student is attending a shorter vocational program. In other cases, the student may be part of a longer program but need a loan to finish his last one or two semesters.


Repayments

After getting a job, your student begins repaying the loan directly to you. Students generally graduate within 12 months of the loan's start date and often already have a job lined up. Some Vittana students already work at a part-time job during their studies and opt to begin repaying earlier. Currently, the repayment rate on Vittana loans is approximately 97%.

Every month, as the 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.

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


Vittana's costs

When you invest $25 in a student on Vittana, we promise you that your full $25 loan is given to the student. Neither Vittana nor our local microfinance partner subtracts any fees or any other surcharges in any form from your loan. Vittana also charges no interest or fees in any other form from the student or local microfinance partner.

But like any other organization, Vittana incurs regular costs for employee salaries, technology and hardware, rent and other operating expenses. Instead of building our costs into your loan,

however, we try to be as open and upfront as possible. After making a loan to a student, you have the opportunity to donate as much (or as little) as you want to Vittana itself. This donation is completely optional — you are under no obligation whatsoever. As it turns out, most lenders do choose to donate and, over the long-term, this money is how Vittana will pay its way.

But while we're still small, Vittana uses generous seed funding from a number of entrepreneurs and executives of well-known technology companies and leading microfinance and social justice foundations to grow and run its operations.


Risk and due diligence

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

We are confident in our partners and trust them. However, due to reasons ranging from natural disaster to political instability to

economic fluctuations, there is still risk associated with lending to students in developing countries. Vittana does not guarantee repayment and a loan on Vittana may result in financial loss.