Loans for students in developing nations help fight against poverty
In deciding the amount to lend to each student, Vittana considers both tuition and other costs of going to school. The average loan of $750 covers the entire cost of the student’s education, which may include fees, transportation costs and living expenses for the student and their family.
Just one of the many lives touched by the Vittana opportunity is Alice Benitez. In 2012 she heard through a friend about the possibility of continuing her education by applying for one of their educational loans. Approved and fully funded, Benitez returned to college. Today she continues to work on her degree in the medical field. When she graduates she'll be able to obtain a good-paying job, repay the money she borrowed and help her uncle's family live a more comfortable life.
Every day Chakrabarti hears from students like Benitez whose lives have been transformed because of the opportunity Vittana gives them to pursue higher education.
First, there is the economic transformation: the average loan recipient triples their income. “For many that means going from two to three dollars a day to ten,” he said. “It is the difference between living hand to mouth and having some cushion when things go wrong — the difference between fighting everyday to make ends meet to being able to think about the future.”
Charkrabarti also sees an emotional transformation in those who receive loans. “For many this loan is the first time anyone has ever put any trust in them,” he said. “Their whole lives they have had to scrap for everything, and so many of them are just exhausted. These loans make their difficult journeys a little bit easier and demonstrate trust and confidence they haven’t known before.”
Chakrabarti believes that by helping young men and women get an education, donors are also helping future generations. The benefits to children of educated mothers have been well documented in sociological and economic literature: lower infant mortality, higher vaccination rates, higher literacy rates and more.
Chakrabarti has found that loan recipients end up helping the entire family. “In Latin America and India,” he said, “people are very family oriented.” Former loan recipients pay their siblings’ college tuition and private school dues for their nieces and nephews.
Not a scholarship
Currently Vitanna has a 99.8 percent loan repayment rate. Chakrabarti says this is important for two reasons.
First, as one of his mentors told him, every time you give something to someone you take away a little bit of their dignity. Chakrabarti believes that giving people the opportunity to pay this money back helps develop confidence and a sense of efficacy. Loans are a form of trust — a relationship between equals.
On a more practical level, the success of his organization hinges on repayment. “My goal is to fight global poverty through education,” he said. “If we just give out scholarships then we can only help the top one percent of students. Once the scholarship is dispersed we’re done. If we give people loans, we can multiply our impact.”
“There are only so many donations in the world,” Chakrabarti said. This system is a way of doing great things over and over again, and hundreds of lives can be changed with just a small donation.