Case study

Vittana's First 1500 Student Borrowers

Helping poor students access loans for higher education
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This paper highlights the achievements of Vittana, a U.S.-based product development non-profit capital provider, since its inception in 2008. It discusses Vittana's and its partner MFIs'’ efforts to demonstrate that student loans are viable. MFIs provide financial services to millions of poor and low-income families. They are well-positioned to reach youth who lack resources to complete higher education. But MFIs have done little to tap into this market, discouraged by common misunderstandings about student lending. The paper lists five myths of student learning that Vittana has debunked by creating and funding high-performing student loan products at 19 MFIs in 12 countries. These myths include:

  • Students won't repay;
  • Students cannot find co-signers;
  • Student loans aren’'t sustainable;
  • Student loans will be too large and too long;
  • Student loans will not be a viable product, without guaranteed jobs.

Going forward, Vittana intends to use data from its partners’ successes and failures to ignite student loan markets around the world. Vittana'’s capital and student loan expertise aims to help MFIs and other financial institutions reach one million unserved young people by 2015, by encouraging greater competition and innovation in student lending.