School girls in India
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Microfinancing started out as a way to get small business owners who don't have access to bank loans the funding they need in order to grow their businesses. The lending strategy has grown to help people all over the world, and primarily women who were found to have the least access to financing yet the highest likelihood of repaying loans. Now, it has spread to helping children who need loans to help them get into quality schools.
Janta Foundation is a brand new non-profit organization directed at young school children ranging from kindergarten through high school in developing countries. Janta recognizes that a solid education can go a long way in alleviating poverty. If children in poverty-stricken areas are able to get into good schools while young, they're much more likely to thrive as adults. Thus, Janta is helping children in need, and the organization is just launching the world's first microlending program for students, starting in India.
How Small Loans Help Make Huge Impacts
In places like India, just $25 in a microfinance loan goes a long way to help get those children into schools that will provide such a necessary education.
Just like microlending through organizations like Kiva or MicroPlace, Janta allows individuals to support children and young adults in the developing world through these very small education microloans and scholarships. A person can log on to the website, select a child they wish to lend to in (so far) India or Nicaragua, and provide funding that goes 100% to the specific student to help them get pay for a quality education. It can be a loan, or a donation towards a scholarship.
Once enough funds are gathered for the particular student's education, the money is sent to a field partner who distributes it to the student or to the school. A lender can then track the student's educational progress, which is submitted to the field partner by the student and posted on the website.
After a set period of time, the loan is repaid. The field partner keeps the interest accumulated in order to cover their costs for the program (the interest rates of the loans, however, are of concern since that is a key point that can either help or hinder the prosperity of the student and their family), and the original balance is returned to the lender. Meanwhile, the most important step has already occurred - the child has an improved chance at forging a better future.
Families Prove Education is Meaningful
Janta has already tested the microloan program during a year-long pilot program. With help from the Drishtee Foundation, which works with such entities as the Acumen Fund, the Clinton Global Initiative and Microsoft, Janta has been able to reach students in 25 villages across northern India and make loans to primary, secondary and vocational students. Right now, those loans are being repaid, proving that the program is working. It also proves how serious students and their families can be about getting a great education so that the next generation of a family has hope for a promising future and a life free of poverty.
"People recognize that education is truly the best way to alleviate poverty, especially for girls in the developing world," said Mahant, "and now, with just $25, they can make a lasting impact on a child's life."
Microfinancing has been highly successful for businesses. Perhaps by investing in the education of children, it will be equally as successful for pulling millions of people out of poverty in the coming years.
More on Microloans
Green Investing with Microloans
7 Microfinance Organizations for Maximum Impact, Minimal Investment
MicroPlace and How Micro Loans Make a Big Difference (Video)
In Just 4 Short Years, Kiva Hits $100 Million In Microloans
