Microfinance, a model well known for helping out small business owners throughout the world, is now being applied to student loans.
One such initiative, called Vittana (which I learned about through the TBD newsletter), has a premise like Kiva’s—people anywhere in the world can lend any amount they want ($25 is suggested) to the recipient of their choice, and the loan recipient eventually pays back the interest-free loan in full. In the case of Vittana, all of the loan recipients are students, studying a range of subjects from English to law to accounting. Right now, the students are all in Nicaragua, Paraguay, and Peru, where Vittana works with local microlending organizations to select loan recipients and distribute funds.
Another site, UniThrive, is experimenting with the microlending model at Harvard University, where they’ve set up a system for alumni to lend to students, interest-free. And if alumni wish to go beyond financial investment, they can choose to offer career advice and other forms of assistance to students. UniThrive hopes to expand to other schools soon, after its trial period at Harvard.
[This blog entry appeared on an older version of Idealist; any broken links are a result of having re-launched our site in Fall 2010.]