Monday, June 15, 2009

Matching alumni to students

The internet has the potential to play very useful roles in matching donors, volunteers, and service providers, with their counter-party recipients, beneficiaries and buyers.

The most famous example of such internet based communities is non-profit Kiva, which lets lenders browse profiles of borrowers in the developing world, offering as little as $25 toward projects like helping a farmer buy fertilizer to increase crop yields, and which now lends about $1 million a week interest-free with a re-payment rate of 97.8%. It also channels money to borrowers through microfinance institutions in their home countries. Sometime back, I had posted about the role of SingleStop USA, a poverty fighting startup, which seeks to "connect the working poor in New York with government funds and services intended for them".

Now NYT draws attention to a newly formed non-profit organization in the US, Unithrive, which matches alumni lenders and cash-strapped students, who post photographs and biographical information and can request up to $2,000 in interest-free loans, payable within five years of graduation. It would pool a number of lenders to meet an individual’s total request, and then pay its loans directly to a university as part of a student’s tuition, so as to reduce the transactions costs.

The attraction of such donations is that alumni will have a personal connection to current students - those requesting loans list hometowns, majors and classes they have taken - and alumni can lend to students with whom they feel a bond. They are promised updates three times a year from students they support Put a face to your contribution. They also get their money back after the loan is re-paid.

Similar models of matching beneficiaries with donors can be useful to crowd in resources from private individuals and agencies, so as to supplement the resources of the government in addressing various poverty eradication and welfare challenges. There is a huge opportunity for non-government agencies to set up web-sites and organize the process of channelling such assistance from those providing it to those in need of the same. Some of the important areas where such interventions can work are
1. Funding assistance to poor students for higher education
2. Donations like furniture for schools and equipment for hospitals
3. Micro-loans for Self Help Groups (SHGs)
4. Treatment costs for poor patients, say, children suffereing from heart complaints.
5. Loans for poor small scale entrepreneurs in specific fields/sectors

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