Vittana's First 1,600 Students

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Vittana's First 1,600 Students

  1. 1. Education changes everythingFive Reasons MFIs Don’t Lend to Students & 1,600 Why They Should Global Microcredit Summit 2011 Nick Cain Regional Program Manager, LatAm + Africa nick@vittana.org http://vittana.org/mcs
  2. 2. What is ? U.S.-based product development TA provider & p2p funder. Creates student loan markets through partnerships with MFIs. Founded May 2009 Loan products for 20 partner MFIs university and $1.3MM disbursed to 12 countries vocational education >1,600 students. at leading MFIs.
  3. 3. Myth #1: Students won’t repay 2011 PAR 30 (%) 5 Q3 PAR 30 - Portfolio 4.24 Subsets: 4 4.01 3.51 • Interest-only grace period: 0.0% 3 3.2 • Student unemployed at time of 2 loan: 0.0% 1 • Loans > $1,000: 4.36% 0EOY 2010 Q1 2011 Q2 2011 Q3 2011 http://vittana.org/mcs
  4. 4. Myth #2: Students can’t find co-signersVittana Students with Co-Signers 2011 Market Study: – 94% of clients are willing to a co-sign a student 100% loan for their child. – 74% of clients are capable of finding a co- signer elsewhere in the family or in the community. http://vittana.org/mcs
  5. 5. Myth #3: MFIs will always lose money on this product Return on Student Loan Portfolio5.00% Conditions4.00% Interest-free Year 1: 50%3.00% capital: Year 2: 25% usage2.00% Cost of non- 10%1.00% P2P capital: Product APR: 18%0.00%-1.00% Avg loan size: $1,000 300 1050 2000 4500 Total Active Student Borrowers http://vittana.org/mcs
  6. 6. Myth #4: Student loans are too big Asia: Latin America: Avg Loan: $500 Avg Loan: $815 Middle East: Avg Loan: $1,200 Sub Saharan Africa: Avg Loan: $650 http://vittana.org/mcs
  7. 7. Myth #5: There aren’t enough jobs Change in Monthly Income Post-Graduation Nicaragua 45 40 40 35 # of students 30 25 20 17 15 12 11 10 5 3 5 1 1 0 0 $100 $200 $300 $400 $500 $600 $700 ∆ monthly income ($) Survey of 90 Vittana graduates in Nicaragua: – 76% are currently employed in their area of study – 78% reported a raise or promotion after graduation http://vittana.org/mcs
  8. 8. Results and Impact to Date PAR 30 3.51% (as of July 31, 2011) 140% confirmed income change 275% projected income changeIsidro Garay Stephen Lumanog Mauda MairenaCountry Nicaragua Country Philippines Country NicaraguaCurrent Dentist Current Welder Current CustomsProfession Profession Profession OfficialConfirmed 300% Confirmed 130% Confirmed 130%income ∆: income ∆: income ∆: http://vittana.org/mcs

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