Vittana, a non-profit micro-finance lending service which provides education funding, is now enabling lenders to re-lend directly. Lenders on the service now no longer need to go through PayPal directly for each payment and re-payment.
CEO Kushal Chakrabarti said no June 12th, “Today, I have the honor of announcing that, as of last week, Vittana lenders had given over 200,000 US$ in loans to hundreds of young people who want to become engineers, policemen, biologists and much more.”
Vitanna is closer to the business model of Kiva than the commercial peer to peer lending companies such as Prosper.com and Lending Club. Vitanna aims to “enabling students around the world to get access to higher education for the first time.” The company says that student loans do not exist in most parts of the world. The non-profit partners with local microfinance organization around the world to provide vocational or provide funding for the last few semesters of college.
The non-profit describes the lending process on its website, “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.”
The non-profit says that it can keep repayment rates high from its borrowers with its 12-month interest only grace period and the requirement to have a cosigner who is a close relatively. The organization also favors close relatives of those that have already participated in the system.
