A partnership of this kind is strategic for the two nonprofits. San Francisco-based Kiva asks its donors to lend as little as $25 to help small business owners in the poorest nations jump-start their business.
Meanwhile, Seattle-based Vittana works with local organizations to develop loan alternatives for low-income students, so they can pay their tuition and graduate on time.
According to a Vittana blog post, on April 2, all student loans that Vittana sources will appear on Kiva. What that means is that Vittana is asking Kiva’s community of donors to give $25 (or more) to help a student pay for college or university and secure a job after graduation. Potential donors can browse hundreds of student profiles online before providing a loan.
“With Kiva and Vittana working together, we can help to break the cycle of generational poverty and expand access to higher education by proving to financial markets that students can and do pay back loans,” said Kiva president Premal Shah in a statement.
The organizations say they are solving a huge need, given that student loans are scarce in the developing world. Students outside of the U.S. and Europe don’t typically have the credit history to prove that they can pay back loans on time. This makes banks and other financial institutions reluctant to lend to young people.
In 2014, Vittana and Kiva hope to help some 20,000 students access these “crowdfunded” loans for their tuition across Latin America, Southeast Asia, and Africa. They will focus on countries where job opportunities are fairly abundant but typically require a candidate to have a college degree.
To date Kiva and Vittana claim to have crowdfunded $232,000 for 231 students.
Kiva portfolio manager Carlos Pierre said the company plan additional partnerships in the future. “We are very open to partnerships with other socially minded enterprises,” he said.