Vittana/Africa: Bringing Student Loans to Africa

“10 Most Innovative Companies in Finance”

“next new thing in charity”

voted by 1.7M readers as “#1 game-changer in philanthropy”

Building a world where anyone can go to college

Kushal Chakrabarti

http://twitter.com/kushalckushalc@vittana.org

Co-Founder and CEO, Vittana

Young organization with bit of success and a big vision

Vittana/Africa: Bringing Student Loans to Africa

“10 Most Innovative Companies in Finance”

“next new thing in charity”

voted by 1.7M readers as “#1 game-changer

in philanthropy”

“a hotbed of innovation”

“Superbien.”

=

$0

$5

$10

$15

$20

282% income change

97% repayment rate

mom as co-signer

+

vocational school

+

specific loan structure

+

...

+

collaborative product development (3-9 months)

+

ground teams

Part 1: Building the Vittana ground model of education microcredit

Part 2: Anyone with $25 can help a student finish school on vittana.org

$100,000

$200,000

$300,000

$400,000

May 2009 Aug 2009 Nov 2009 Feb 2010 May 2010 Aug 2010

Stud

ent L

oan

Port

folio

at V

ittan

a M

FIs

I want to take you on a journey...

Three years ago...

NYT: Father spending 30% of income on son’s education

Took as challenge to learn as much about microcredit, education

SSIR: “Reimagining Microfinance,” June 2008

#1 cause of drop-outs in many emerging countries: Financial cost

70+% of drop-outs due to financial cost

#1 increase in spending by 1st-time MF borrowers: Education

0%

25%

50%

75%

100%

Food Fuel Electricity Clothing Education Health

Incr

ease

in S

pend

ing

by 1

st-T

ime

Bor

row

ers

Why  Not?

$700 isn’t that much money in the grand scheme of things

$27$700 ~

Catch-22: No track record => no investment => no track record

Knowledge Investment

Track Record

“Last mile of education”: 282% average income change

282% average income change

$0

$5

$10

$15

$20

Mission: Jumpstart global ecosystem of education finance

1 person can’t invest $50M, but 1M people can invest $50.

Vittana loan model getting better and better

mom as co-signer

+

vocational school

+

specific loan structure

+

...

=

282% income change

97% repayment rate

+

collaborative product development

+

ground teams

$0

$5

$10

$15

$20

3 years ago: Just open up a marketplace

≠

282% income change

97% repayment rate

a Vittana marketplace for education funding

$0

$5

$10

$15

$20

1 year ago: try to “teach” MFIs

282% income change

97% repayment rate

≠

mom as co-signer

+

vocational school

+

specific loan structure

+

...

+

shallow product support $0

$5

$10

$15

$20

Today: Work directly with MFIs for 3-9 months + first ground teams

=

282% income change

97% repayment rate

mom as co-signer

+

vocational school

+

specific loan structure

+

...

+

collaborative product development (3-9 months)

+

ground teams

$0

$5

$10

$15

$20

Holy grail: repayment probability of female, 20-25, Peru, nurse?

segment expected repayment

femaleLima, Peru

nursing20-25 age bracket

<2 kids

98.3%

Demonstration effect: Jumpstart global ecosystem of education finance

1. What if you could rigorously demonstrate MFI- and investor-side financial viability?

2. What if you could causatively, statistically significantly demonstrate impact?

3. What happens then?

How do you create meaning with money in education?

Risk-tolerant, patient capital

+

A new idea

+

Heavy-duty ground program development

=Meaning

+

Possibility

First non-Vittana funder of education micro-loans — Kiva

$100,000

$200,000

$300,000

$400,000

May 2009 Aug 2009 Nov 2009 Feb 2010 May 2010 Aug 2010

Stud

ent L

oan

Port

folio

at V

ittan

a M

FIs

Total Vittana

Nardith needed $700 to attend nursing school

Nardith TorresNursePeru

Needed

$700http://www.vittana.org/students/15

mom in NorwayMBA student in Bostonbanker in NYCStanford alum in Las Vegasentrepreneur in Seattle...

and 14 others

Not just money, but completely changes reality of choice