Every once in a while an idea comes along that makes so much sense, you wonder why no one thought of that before. It just seems so obvious.

That was my reaction when I first heard about Vittana — through a commercial on Hulu of all things. It was a little shocking to learn that student loans are such a rarity in most of the world. The next step seems obvious as well — of course it makes sense to apply the microfinance model to student loans.

The concept takes a little explaining sometimes to my friends and family. In the U.S. we have a negative reaction in our collective gut toward student loans thinking about all that interest, without realizing that those loans made our current lifestyles possible.

There's me in the garden at the house where I live, doing the ol' hold-out-your-arm self-portrait.

Outside of the US, people I talk to have a different reaction. First they’re surprised to learn that low-interest student loans exist in Latin America, then they tell me how much they’re needed. After that, they often ask how they or a family member can get one.

For example, before I left for Nicaragua, I had an online chat with a friend from Peru. When I told her about the Vittana concept, she got really excited. Her family has sacrificed to put their sons through school and now the oldest, David, is finishing medical school. He would like to do a specialty, but there’s no way the family can afford it. David is a smart guy, very friendly and totally capable. He speaks excellent English but often hides it.

People like him deserve all the opportunities they can get.

So many good intentions are focused on what underserved populations don’t have. Micro-finance focuses on what people and communities do have. What’s a commonality that all people on this earth share, regardless of income, education, or culture? They have plans and dreams. They have ingenuity and drive. However so many have shortages in capital and opportunity.

The value of human ingenuity was hammered home when I left a five-year career writing and taking photos for a community newspaper in Kentucky, in search of something with a more global outlook. My wife and I spent nine months in Peru volunteering at an orphanage where I worked every day alongside a Peruvian named Elias.

Elias — friend, inspiration and resident MacGyver at Hogar de Esperanza orphanage in Trujillo, Peru.

Working with him was truly eye-opening. We didn’t have many resources, but we did have PVC pipe and a flame from the gas kitchen stove that we used to fashion a tool to unclog the sewers. We didn’t have money to buy lanterns so the children could participate in a parade at school, but we did have a saw, a riverbank and a stand of wild reeds that we used to make lanterns for the kids. Elias doesn’t have much money, but he has ingenuity in spades, with a mischievous streak to match. And like parents throughout the world, he is scraping together all he can to give his three daughters the best education he can in hopes that they can have more opportunity in life.

People like him deserve all the opportunities they can get as well.

Students in Peru parading with lanterns fashioned from river reeds.

I returned home from Peru and last fall and began the International Development program at the Patterson School of Diplomacy and International Commerce at the University of Kentucky. Having a heart of compassion is important, but courses in economics, statistics and international relations are giving me the analytical framework I need to put my passion into positive action.

And now, during my summer break, I am in Managua, Nicaragua with Vittana partner AFODENIC. I’m learning all I can about the on-the-ground work of microfinance while playing a small part in helping Nicaragua’s leaders of tomorrow such as Julio and Carla achieve their dreams, create a more just country, and carve out a better life for their kids.

Because people like them deserve all the opportunities they can get.

Certainly there are important questions to ask as microfinance continues to develop.  In the beginning, some borrower pushback could have served to keep MFIs in check.  There are some international questions about abusively-high interest rates and the introduction of big banks (seeking big profits) into the traditionally social good-oriented world of microfinance.  There is an ongoing debate about how to make microfinance sustainable and still serve the poorest of the poor.  Additionally, Nicaragua was hit particularly hard by the global economic crisis, thereby exacerbating an already bad economic situation.  Given all these factors, there are most likely farmers who have been taken advantage of in microfinance.  As the number of borrowers in the No Pago movement grows and only a tiny percent choose to renegotiate the terms of their loans given the opportunity, it also appears that many borrowers are now taking advantage of microfinance.

Regardless of motivation, members of No Pago Movement harassed microfinance loan officers, burnt down MFI buildings and blockaded streets.  In response, credit lending institutions began pulling out of Nicaragua, causing potential havoc in certain agricultural communities which relied heavily on foreign investment.  According to EIU ViewsWire “arrears on loans caused by this group [No Pago Movement] have become a serious problem and threaten to imperil the sector’s future.”  Recognizing the potentially disastrous effects this could have on the stability of the Nicaraguan economy, Ortega changed his previous position.  The National Assembly stepped in and passed the “Ley Moratoria” (Law of Moratorium) in April, granting delinquent borrowers 120 days in which to renegotiate the terms of their loans.  This has served to calm the No Pago Movement, but could have significant long-term consequences regarding access to credit and an MFIs’ ability to operate in Nicaragua.  The 120 days marker has just passed and most recently, the No Pago Movement has been circulating talk about a government bailout.  This is a critical episode in the fate of microfinance in Nicaragua, and it will be interesting to see what happens next.

AFODENIC staff discuss interest rates at a recent meeting.

The work of making educational loans available to Nicaraguans continues.  It is a full-cycle affair, requiring the hard work and cooperation of lender and lendee alike.  Like all forms of credit, it is the responsibility of both parties to ensure the loan conditions are fair and paid off.  MFIs must educate their borrowers and ensure that the services they offer are both fair and understood.  Borrowers have a responsibility to understand the terms of the loan and not enter into an impossible contract.  In the end, it will be a well-established history of good lending practice, like that of AFODENIC, good borrowing practice, and support by organizations like Vittana that will enable microfinance to pull many more Nicaraguans out of poverty.

If you would like to support a Nicaraguan student, click here.

If you would like to read more about the No Pago Movement, here are some possible resources in English and Spanish.

Hurray! It’s Friday – and not just any Friday, but Friday the 13th! Are we suffering from Friggatriskaidekaphobia? No way! We think 13 is a lucky number – and Friday is always a good karma day for us.

Why? At Vittana, we look forward to Fridays because we get to look back at the week, and see how many students and lenders we’ve been able to connect, and that’s when the good karma reaches a high point. So, every Friday from here on out at Vittana is officially good karma Friday.

This week, because of our amazing lenders, we were able to fund 10 more students.

There is a Peruvian proverb – “little by little, one walks far” – that really resonated with us this week. Each week, more students appear on Vittana, and each week, lenders find a student, fund them, and new opportunities are born. 10 more hard working, deserving individuals now have the opportunity to finish their education. That’s the kind of karma that works. That’s the kind we want to keep delivering.

We know it works, because our students are working hard to make the most out of the new opportunities they’ve been given. We love it when we get updates from our students – their stories, where we learn more about them and the incredible progress they are making.  This makes us smile, gets us excited, and builds hope. Step by step, loan by loan, we are all making a difference.

To help celebrate Friday, we pulled out a great update from one of our students – Scarlett, who is really working to make the most of her opportunities. Hard work and hope keep her going.  As our friend Katie says, ” It’s hope that keeps you human.” Scarlett is an example of what happens when you throw opportunity into the mix, as well.

Scarlett Constansa Aguirre Ramos

Scarlett is an incredible Vittana student. She lives in Nicaragua, already has a degree in medicine and has been practicing for about 10 years. Scarlett believes strongly in serving those who have less. She travels a few times a week to smaller towns to visit her poorer patients who cannot come to her.

Scarlett's plans post-graduation include a free walk-in clinic for poorer patients.

Given that many can only pay for the visit OR a prescription, Scarlett often visits her patients for free, offering needed care and health education classes as well.

When she completes her specialization in pharmacy with her Vittana loan, she will not have to pay an outside pharmacist to handle formulating her  prescriptions, and will better be able to serve her patients by providing all the services they need – even if they are unable to pay for them.

In her “spare” time, Scarlett is also taking English classes and spends time with her two daughters.

That’s amazing! A working mom, who already goes out of her way to take care of others, now seeks even more opportunities to use education to not only help herself, but others in her community as well. That’s inspiring, and we want to thank Scarlett’s lenders who helped pay it forward to make this happen.

Inspired? Read more about Scarlett here, or find a student like her to lend to here.

Cheers! -Lisa

Almost every day is a good day at Vittana. We work hard, we have fun. We’re scrappy, and we sweat the details 24/7 to get more students funded.

Like any company, some days are better than others. Last week, we had an extremely good day.  Why? We received an amazing update from Haward, one of the early students we funded.  We wanted to share his full story. Read on, and enjoy.

About 10 months ago, a 22-year-old young man named Haward Alvarez Morales appeared on Vittana.org. He was just 1 semester away from finishing law school in Nicaragua. Through a combination of scholarships, part-time jobs and help from his family, he’d been able to get this far. Now, however, his father had lost his job and though Haward was earning enough to get by, he would need 2-3 years to save enough to finish his last 2 months of school. The amount? $1000.

Here is Haward’s original loan request page:

http://www.vittana.org/students/22

We first interviewed Haward back in October last year:

Over the course of a few weeks last October, 11 Vittana lenders from Seattle, San Francisco, Chicago and many other cities from around the world made loans for everything between $25 to $300. Because of these 11 people, Haward was able to get his $1000 loan and sign up for his final classes.

Haward finished law school and graduated in January. He sent us a scanned copy of his diploma. He didn’t just graduate — he graduated cum laude, in the top 10% of his class. Since then, he’s gotten two different raises and a new job.

Last weekend, we got an email from Haward. He wrote:

“I wanted to let you know that I’m currently working on corporate issues (contracts, advisory services, etc), taxes, and property. With that in mind, I’d like to offer you our company’s legal services. Garcia & Bodan is one of the best law firms in Nicaragua, and if you are interested in receiving legal advice, whether for Vittana or for AFODENIC, I would like to try to get a pro bono arrangement for you.”

We were floored. Here was our Haward, a student that had won us over with his million-dollar smile back in October, a student that had needed our help to get his $1000 loan to finish his last semester, coming back just a few months later to offer his time pro bono as a grown-up, full-fledged lawyer. He couldn’t directly help another student right now, but could he help other people help more students?

He is just amazing, isn’t he? It’s inspiring to see how, in just a few months, Haward has gone from a youthful, scrappy student to a professional, transformed young man — you can see it in his clothes, his books, his confidence, his articulateness. I know he’d protest but, I have to say  - we are all so inspired by Haward. He’s a amazing example of what’s possible when you believe in someone and give them a real chance.

There are so many others like Haward. Every month, $25 or $50 at a time, hundreds of Vittana lenders from around the world help young people around the world achieve their dreams. Right now, 20+ students’ loan requests are on Vittana.org — including many other Nicaraguan young men and women like Haward — waiting to be funded. Who do you think might be the next Haward?

Make a loan today. Just like with Haward, you might be surprised how little it takes to help a young man or woman make their dreams a reality.

http://www.vittana.org/students

To Haward — a truly inspiring young man,

Kushal

Have you looked closely at the bios of any of our students lately? They have amazingly compelling stories. Often, it is our Fellows who meet them in person and tell their stories (like here, here and here), but as we are currently in a brief lull between Fellows, I am going to do my best from Seattle.

Antonio Alejandro Vargas Osorio lives in Masaya, Nicaragua. He’s 24 years old, and dreams of becoming a doctor. More than that, he wants to be a surgeon helping the people who need it the most.

Alejandro is studying to be a surgeon

There are a myriad of reasons to want to “help” people, but Alejandro is ahead of the curve on this one. When asked what his greatest dream was, he responded “My dream is to be a medical specialist who can actively influence and advance the development of public health in my homeland. … I want to do this for myself and my family, and most of all I want to do this because I want to build a better world for everyone.”

The course of study to become a surgeon is extremely difficult in any country, but Alejandro has worked hard to prepare himself for his career, even going so far as to spend his holidays visiting operating rooms. And in Nicaragua, where less than 9 percent of men have been able to obtain college degrees, his perseverance is incredible. He doesn’t mind working hard, though: “I have learned that every sacrifice and effort is worthwhile.”

He’s been attending Universidad Americana to finish his degree, but needed a loan to be able to continue to go to school. So he requested a Vittana loan for $1121 through our partner in Nicaragua, AFODENIC.

The incredible thing is, with this loan and when he finishes school, Alejandro will be able to more than double his income. He currently only makes about $750 a month, but as a surgeon, he can make around $1750 a month. That’s a huge leap for him and his family, and his Vittana loan (just $1121) made it all possible.

Just in case you were worried Alejandro doesn’t leave any time for the fun stuff, he also exercises regularly (baseball is a favorite). Vittana lenders have currently contributed $421 to his loan, so if you want to help close his loan out, click here.

This week, I will travel to Managua to spend some time with Vittana’s Nicaraguan partner, AFODENIC.  I shared some quick thoughts about the trip (and some screen time for Dusky) below:

[youtube]http://www.youtube.com/watch?v=wuOFkFbGWy8[/youtube]

A number of outstanding Nicaraguan students, including Jazmina Amador, Maria Valverde Rios, and Howard Morales, are currently fundraising on our site.  Make a loan today!