June 27, 2010; Source: Columbus Dispatch | Microlending is most often associated with seeding very small businesses, but now thanks to an enterprising Web entrepreneur, individuals willing to chip in small amounts of money are creating loan pools for college students in developing countries.
Vittana, the new nonprofit college loan service, is the brainchild of 27-year-old Kushal Chakrabarti of Seattle, who formerly made a name for himself at Amazon.com. At Vittana.org, visitors can search for students seeking help in financing their college studies and make a loan for as little as $25. As the Columbus Dispatch notes, while “a bank might not be willing to hand out the average $657.50 that students listed on Vittana’s website need to get a degree . . . maybe a couple of dozen people would be willing to lend $25 or $50 each, with a 97 percent chance they’ll get it back.”
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Vittana funnels money to students in developing countries through partner microfinance lenders. These lenders are allowed to charge a modest amount of interest to cover their administrative costs. Individuals who make loans are paid back in full after the students graduate and start earning an income. Chakrabarti’s earlier claim to fame was the design and development of Amazon.com’s recommendation engine—”You might also like . . .”—which suggests to customers other items they might consider buying based on their past purchases.—Bruce Trachtenberg