A Model for Microfinance-Supported Education Programs
This paper aims to develop a model that provides a framework for microfinance clients to educate their children. The goal is to implement this program and determine the effectiveness of an education-focused microfinance lending program. The paper proposes a lending model that aims to provide capital for clients' business initiatives, while also ensuring that the client's children received proper education. The model works as follows:
- Clients originally go through a trial period of receiving business loans to establish that they are reliable in terms of repayment;
- Once the program begins, clients begin to receive the loan at a discount;
- Scholarship fund will be created for the client's child;
- Portion of loan repayment will go towards the scholarship fund;
- MFI and other potential sources will match the client's contribution.
Prospects appear promising as microfinance infrastructure grows in developing countries and incentives for education programs have a successful track record.