Here is a short compilation of graduates telling how Vittana loans changed their lives.

[youtube]http://www.youtube.com/watch?v=M63TTSbeocg[/youtube]

A collection of photos from my time outside of the office in Nicaragua.

The shadow of folk hero and guerilla leader Augusto Sandino looms over Managua and the Nicaraguan consciousness. Beside him are the Christmas lights common throughout Managua that stay lit all year-round.

An ice-cream vendor peddles past the wreckage of Managua's historic cathedral, ruined in the earthquake of 1972.

The clock on the historic cathedral is frozen forever at the hour of the earthquake, about half an hour after midnight, Dec. 23, 1972.

Nicaraguan President Daniel Ortega joins fellow revolutionaries Che Guevara and Augusto Sandino in a display of keychains for sale.

Teenagers hang out by Lake Managua.

Horse-drawn carts mix with cars on Managua's main street.

A woman sells Nicaraguan snow-cones or raspados while a carriage passes Granada's cathedral.

Enjoying a baseball game in Granada. Nicaraguans take the national sport seriously.

A security guard in Granada sheepishly asks to have his picture taken.

One of the nation's thousands of stray dogs takes an adventure through Granada.

Volcano Masaya emits sulfurous gas.

Volcano Concepción with its perfect cone, rises out of Lake Nicaragua.

A howler monkey on the island of Ometepe.

The tropical climate produces forests full of flowers.

A woman poses for a picture in San Juan del Sur.

Rural Nicaragua.

A bus attendant's friends joke about the size of his muscles.

Near AFODENIC's office in Juigalpa, cattle drives in the highway are a common sight.

Co-workers Humberto and Marcela enjoy a tortilla with cheese and cream. I also tried pinolillo, a drink made of ground-corn and chocolate.

Fishermen in Casares head out for a full night of fishing.

Fishermen weigh their catch of barracuda in Casares.

For me, it was never really a question of whether or not I could go to college. Sure, money has always been tight in the Foster household and finding a way to pay for college for their four sons was never easy for my parents, but it wasn’t optional either. If we wanted to go to college, we would find a way. Whether through scholarships, student loans, or our own savings, I am fortunate I grew up in a country where a financial support system exists for young people wanting to go to college.

The problem isn’t necessarily the cost of classes, attending college can be surprisingly cheap in Nicaragua. The schools most Vittana students attend vary in cost from about $30 to $120 a month. However, working full-time to earn an average of $240 a month, like many of our students do, this makes up a significant cost. Yet the majority of our students have been able to scrape by and pay these costs, usually without any assistance from their families.

The real killer comes when it’s time to graduate. After 4 or 5 years of studying, getting good grades, and working hard to pay for it, university students in Nicaragua face one final wall that many are unable to scale. After all their studies are done, students typically have to pay about $1,000 USD to receive their diploma. This fee is called a Seminario de Titulacion and is universal in Nicaraguan schools.

Because of these daunting costs, most college students do not graduate. According to data from the National University Council in Nicaragua, less than one-third of students enrolled in university actually graduate.

Nora Karina Avilez is one of the students who beat the odds, although she used to fall into the majority of students who didn’t. She made it through the challenges of five years of college, defending a thesis in psychology, two practicums, walking to school while pregnant, and holding down a full-time job to pay for it. The challenge she couldn’t overcome on her own was paying her final graduation fees. After finishing all her coursework, she languished in a job outside her field of study for two years. This woman’s dreams and her ability to take care of her daughter were put on hold because of $200.

With a $200 loan Nora Karina Avilez was able to pay her final graduation costs, receive her degree and find a better job.

For Nora and other students in Nicaragua, there aren’t many options for financing their education. They could borrow money from a bank but the chances of being approved for a loan are very low. Even if approved, interest rates are typically about 40-50%, turning a formidable cost into an unimaginable cost. In contrast, our partner’s rates are 10% a year.

With a low interest-rate loan, Nora was finally able to pay for her degree in psychology in the summer of 2010. Degree in hand, within three months she was able to get a job with Latin Top Jobs as an assistant in human resources. She has lots of friends who are in the same position she was — they went all the way through school but couldn’t afford the final graduation costs. And she’s not the only one of our students that has friends like that.

Nora explained that those without their diplomas are mostly working in low-paying or temporary jobs outside their field of study, like she was. She explained the crux of the problem — employers don’t care what knowledge you have in your head, she said. They want to see the piece of paper in your hand. Without a loan, she would have remained in that same situation for years.

“Education has guaranteed a future,” she said, “not just for me, but also for my daughter.”

Help other Nicaraguan students like Nora scale this one final wall by lending here.

Watch this video to hear Nora’s story in her own words.

[youtube]http://www.youtube.com/watch?v=bvw48hK2CbU[/youtube]

I am stationed at an ideal place to measure the impact of Vittana loans on students and their families. AFODENIC in Nicaragua is one of Vittana’s most established partners, having worked together since 2009. More than 100 students have graduated college because of Vittana loans through AFODENIC. I’ll tell you more about that impact in a later post. For now, let me tell you about some of the interesting changes our partner is bringing to Nicaragua beyond their groundbreaking work with student loans.

Student loan promoter Marjorie Gonzalez talks with students at the University of Commercial Sciences in Managua.

AFODENIC has an interesting, although long, name that translates as the Association for Fomenting the Development of Nicaragua. “Foment” isn’t a word we use much, except for describing a revolution maybe. But I kind of like the word, and maybe we are actually fomenting a revolution of sorts – a revolution of education and opportunity. Yet somehow I don’t think that’s what all the graffiti around town reading “¡Viva la Revolución!” is referring to.

Although AFODENIC currently actively serves about 250 Vittana students, this still makes up a small portion of their total number of clients. All in all, they have about 5,000 active borrowers. The scope of AFODENIC transcends traditional microcredit into community development projects such as solar panels, water purification systems and affordable housing. In fact, about half of their $8,000,000 portfolio is dedicated to building or homes in low income neighborhoods.

Lawyer Ileana Vega explains the legal aspects of the loan before disbursing loans to clients.

This year, AFODENIC expanded their services further by offering insurance policies to people who wouldn’t otherwise have access. If a member of a family dies, it’s an emotional blow that may also spell financial ruin for a family. Insurance can help soften that blow.

All of these services fit under the umbrella of providing access to financial services for a majority of the population who wouldn’t otherwise have that access.

Clients make payments on their loans.

This extensive approach started with a project from a Spanish NGO, Peace and the Third World, working those in need outside the city of Juigalpa. This initial project resulted in a microcredit initiative for farmers, which led to the founding of AFODENIC in 1999.

The current director, Francisco Montoya, was one of the founders. He’s a warm man, with an air of quiet competence that completely breaks down when asked about financial services for the underserved. He explains that although much of AFODENIC’s work is now in the capital city of Managua, where I’m currently based, there is still a strong emphasis on support for farmers and rural citizens. Montoya explains that this work is important not only because there are so many struggling farmers in Nicaragua that lack basic access to financial services, but also for the simple reason that much of Nicaragua’s food comes from these small farms. If farmers have credit to buy high yield seeds and fertilizer or other more productive practices, they can produce more plentiful crops at a lower cost per unit. This translates to better incomes for farmers and affordable, fresh food, benefiting all of Nicaragua’s consumers.

Employees Gonzalez and Leonarda Hildalgo leave the office after a day of work.

Out of this broad slate of projects, education plays an integral part in Montoya’s and AFODENIC’s vision for the future.

“Our vision is to be an instrument, a platform for funding the projects that will develop Nicaragua,” he says, “Education is part of that.”

For one, a lack of education limits personal potential. But as part of a vision for a better Nicaragua, the lack of access to education means something broader to Montoya. Limited access to education means a limit on the potential of the country as a whole. Together Vittana and AFODENIC are fomenting a revolution to make that access limitless.

¡Viva la Revolución! indeed.

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.

Over the past week, Vittana has been the recipient of very good karma from some amazing people and organizations. So, on Good Karma Friday, we wanted to give a shout-out of thanks. We truly appreciate all of the support!

First, the BEAN Seattle team held a date auction, with all of the proceeds going towards Vittana loans. This hard-working, highly energetic, passionate group raised over $15k for Vittana students!

We were more than happy to sacrifice Kushal to the cause (Bachelor #5) and really appreciate that our friend Luis stepped up for us as well (Bachelor #2).  Two lucky ladies will definitely have great dates with our guys!

Kushal on the bidding block at the BEAN date auction

If you missed the event, you can check out the juicy details here: http://bit.ly/cJkFKw

Next, last night we held our own Vittana end-of-summer bash… just as the fall weather rolled into Seattle (yes, we planned that). Many of our lenders & friends stopped by our office to catch up, hang out, and listen to Brett, our CTO (who just happens to moonlight as a DJ) spin his music magic throughout the night. Thanks to the Vittana team for putting the party together, our own Doug McManaway for working the social media channels to get the word out, and to everyone who came by and donated!

Finally, we have another round of inspiring students on the site – individuals like Ricardo. In Nicaragua, where Ricardo lives, only 9% of men are able to finish college. That’s a statistic we all need to work hard to change – so come check out our students and kick off your own cycle of opportunity today.

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

Since my arrival in Nicaragua a month ago, I’ve been struck by two opposing realities. On one hand, Nicaragua has a long way to go. According to the CIA World Factbook, “Nicaragua, the poorest country in Central America, has widespread underemployment and poverty.” The global economic crisis has hit Nicaragua particularly hard. Corruption is common and Nicaragua is still struggling to establish a clean democracy.  Less than 9% of the population earns a college diploma, but even more alarming is that only about 50% of children actually make it through primary school (Unicef).  The problems facing Nicaraguans can feel endless. Truly, it is an uphill battle.*

Erick is about to graduate with a degree in computer engineering.

The other reality I’m faced with every day is that the students I’ve met through Vittana are the ones who will, I believe, help pull Nicaragua up that hill and fight the battle. Over the past month, I’ve had the joy of getting to know many Vittana students. On the surface, they are quite different: I’ve met young students eager to earn their first job, mothers who have gone back to school, fathers in the prime of their career who have decided never to stop learning and growing professionally. They are pharmacists, civil engineers, tour guides, teachers and lawyers and they all have different dreams for the future.  Despite their differences, however, there are attributes that all Vittana students share.

Rolando will be the first in his family to earn a college degree.

Vittana students are usually the first in their family to go to college. Erick (above) and Rolando (side) share a similar background. No one in their families had attended college and it was assumed that they would work construction like their fathers.  Erick and Rolando started working in construction at 13, but never lost the drive to go to college.  For Erick, his day came in the form of a computer course he took at a technical school which inspired him to pursue (and complete!) a degree in computer engineering.  Rolando discovered his future career in customs through a program at a local technical school.  After his practicum ends in September, he will have a degree–and a job– in customs administration.  (Their stories offer yet another argument for vocational training).  Both Erick and Rolando are the first in their respective families to obtain a college degree.

Scarlett plans a free walk-in clinic for poorer patients.

Vittana students are busy, motivated and hard-working. Almost every Vittana student I meet works multiple jobs, pursues multiple degrees and has a variety of outside interests, from travel to philosophy.  They are driven and will do whatever it takes to provide for their families.  In addition to attending school full time and working full time as a dentist, Isidro is also a pastor of a church, and helps his wife run a school. Not content to waste a single opportunity, Scarlett works full time as a doctor, travels to visit her rural patients a couple times a week, takes English classes on Saturdays and attends university for a specialization in pharmacy on Sundays. Did I mention she’s also the mother of two children and helps to support her husband who is also studying a second degree?

Vittana students are committed to improving the lives of their fellow Nicaraguans. I have to mention Scarlett again. During her residency in medicine, she was shocked by the poor healthcare for women giving birth. She discovered a Dutch NGO and together they trained the local curanderos (medicine men/women) and parteras (midwives) in basic first aid and family planning.

Isidro is busy growing his dentistry practice.

Vittana students have big plans for the future. Erick, Rolando, Scarlett and Isidro and are not alone in their big plans for the future.  Every student I have ever talked to is not afraid to dream big: starting their own business, open up a financial and law consultation firm, provide a free walk-in clinic and health education classes for the poor, build a school, etc.  The thing is, Vittana students back up their dreams with concrete actions, doing their research, getting the necessary degrees and making the right connections.

Nicaragua is a beautiful country, but I am constantly reminded of—and almost paralyzed by—the extreme poverty and challenges Nicaraguans face on a daily basis. Vittana students, however, are not passive bystanders.  I am confident they have the qualities to make a positive impact in the world around them.

If you would like make a loan to other students like Erick, Rolando, Scarlett and Isidro, click here.

*If you would like to read more about Nicaragua, Victoria Kabak, a former Kiva fellow, wrote a great post about its history and current issues.

Photo Credit: Shared Interest

When I arrived in Nicaragua ten days ago I transitioned officially from Vittana lender to Vittana fellow. In some ways, I get to do what I imagine other lenders would do if they had the time and the means: travel to the corners of the developing world where Vittana has set up shop and see firsthand how their loan is making a positive difference in the life of a student.  I’ve only been able to meet with four students so far—many work full time, go to school full time and also have families—but I was immediately confronted with an economic reality Nicaraguans face all the time:  semenario de titulación. This is difficult to translate.  It would be like arriving at the end of your undergraduate studies and then your university charges you an extra year’s worth of tuition to take a final course and process your diploma.  Sound unbelievable?  The best way I can explain is through student stories.

Kathy Johana Quintero Pérez on a visit to AFODENIC, Vittana's partner in Nicaragua

Kathy Johana is a 34-year-old mother from Managua who has always dreamed of being a civil lawyer, running her own firm and eventually becoming a judge. For five years she worked freelance, raised her young daughters, attended classes and studied in whatever (little) time she had left. Last fall, she finally finished all of her courses and was excited to graduate. She then found out that she would have to pay $1,200 for her semenario de titulación. Until she paid the money, she would not receive her diploma and would never be able to work as a lawyer in any official capacity, much less run her own firm or aspire to be a judge. Not wanting to give up, she went to multiple banks asking for a loan. She was denied at every one because educational loans do not exist in Nicaragua. By luck, she happened across a flyer for Vittana. Kathy graduated in December, started a second degree in accounting and was offered a job at a law firm.

I returned to work the next day and had a visit from Johanna, a 34-year-old teacher from Managua. She started to tell me her story and I immediately noted the similarities between her and Kathy: motivated, hard-working mothers who had diligently paid for school, completed all their coursework, and then lacked the money to pay for their semenario de titulación at the very end. In Johanna’s case the cost was $500*, but for a teacher in Nicaragua, that cost was impossibly high. She went looking for a loan and was refused everywhere until she found Vittana. Johanna graduated in December, received her diploma, got a significant raise at work, and is about to start a second degree in psychology with the goal of starting a school with her husband.

I was struck by their stories. Kathy and Johanna are obviously go-getters; they do not appear to back down in the face of difficulty.  They would probably find a way to support their families no matter the circumstances.  The relatively small loan they received during a tough spot, however, empowered them to charge ahead, develop and dream as professionals  and support their children.

I’ve worked in education and in non-profits, both of which I consider to be long term investments in social change.  You feel that you are doing a good thing, but the results may take years to come to fruition.  After only a couple weeks on the ground in Nicaragua, however, I can unequivocally say that Vittana loans are making a real tangible difference in the lives of students and their families.

If you would like to help a Vittana student over the last hurdle of their education, go to vittana.org/students

If you would like to hear Kathy’s story in her own words, check out her visit on YouTube: [youtube]http://www.youtube.com/watch?v=Nk5FkIWZQI0[/youtube]

*Depending on the school and the degree, semenarios de titulación can cost anywhere from $500-$2500. Given that the annual tuition in Nicaragua is about $1000, the cost to graduate is often more expensive than paying for another year of tuition.