October 3, 2010 | Read Time: 1 minute
Kiva.org, the organization that allows people to make online loans to entrepreneurs in developing countries, has added student loans to its offerings. The group is working with microfinance groups in Bolivia, Lebanon, and Paraguay to make the new loans.
Student loans are not readily available in many parts of the world, largely because there’s no track record and lenders don’t know how much risk is involved, says Premal Shah, president of Kiva. He hopes that what the organization learns from the student loans it offers will encourage banks to make them on their own.
“We may find that students in Peru who get an accounting degree have a high repayment rate but Lebanese students who get a Microsoft certificate do not,” he says. “That kind of data is so valuable for the local finance sector.”
Kiva isn’t the first charity to use the Internet to tackle the problem. Last year a Seattle charity called Vittana started a site that allows people to make small loans to help students in emerging countries pay for college or vocational training.
Mr. Shah says Kiva is open to working with other organizations but that there’s also an argument to be made for having multiple players. “There’s a lot of best practices that get sent back and forth when you do have a couple actors at least trying different things,” he says.
For more information: Go to http://www.kiva.org.
