Loans for Learning

Executive Summary

Loans for Learning is a proposed program, developed by Mondo Challenge volunteers. The aim of the proposal is to develop and implement a system to enable people to attend vocational training by providing financial assistance. The program has been set up to be started in Arusha, but could apply to many towns and regions in the world. A full proposal has been developed and can be downloaded by clicking the link below;

Download loans_for_learning_plan_v100.doc

Outline

Vocational training is a positive step towards employment and subsequent improved living standards for individuals and families. There are people who want to do vocational training that cannot afford the fee structures. There are vocational training centres that have courses and capacity but cannot afford to offer lenient terms. Financial assistance is required to match the students with the courses and improve the chances of employment.

Principles

A program of financial assistance for educational purposes must (i) help those who need it, (ii) be paid for by the student to ensure it is valued, (iii) be financially sustainable to allow the help to continue and (iv) maximise the quality of the training to ensure the effort is worthwhile.

Operation

The key operational factors proposed are;

Develop partnerships with training centres who refer needy students.
Training centres must meet certain requirements of quality.
Needy students form groups of two or more, or can apply as individuals in special circumstances. 
Application is in person and in writing with approval based on set criteria.
Approved students pay a deposit and interest on the loan.
Training centres are paid at the start of each month.
Training centres are paid less than full fees in order to avoid referral of non-needy students.
Students pay by the end of the month.
Repayment period is twice the length of the course.
Non paying students are not allowed to continue with classes.
Post class defaulting reduction activities are implemented.

Financials

Whilst funding is required to start this program, it will be designed and implemented to be financially self-sustaining.  Administration costs are covered by interest paid by students and ‘commission’ paid by training centres. Administration efficiency is maximised through group management, monthly payments and utilisation of existing micro-finance infrastructure. Defaulting costs are minimised by paying training centres monthly.

Marketing

Key marketing components of Loans for Learning are;

Establish perception of respect, quality, understanding, honesty and community through end to end management of the service and communications.
Controlled growth through developing training centre partnerships.

Pilot program

It is proposed that a pilot program of fifteen students and three training centres be started as soon as possible, 2005. The purpose of the pilot program is to establish whether the vision of the program can be achieved whilst remaining financially stable. With economies of scale and improvements in the operation and processes expected, the pilot program will be predominantly indicative. Evaluation of the program would be expected after six months of starting the pilot, with a decision made on further investment and growth in the program.

Micro-finance role

With established infrastructure in microfinance, an NGO in

Tanzania

may be suited to provide the payment management components of this program. There is also application, evaluation, client management, impact assessment and other tasks that the NGO may also be suited to performing.  It is anticipated that partnership with an educational NGO might be required to perform some of the functions of the program, however the objective will be to have all functions in one organisation if possible.

Next steps

It is anticipated that the senior management of the NGO will evaluate this executive summary on an introductory level. If there is interest in further discussion, then it is suggested that a meeting be arranged between the proposal developers and selected members of the NGO.

M. Liubinskas - mliubinskas@hotmail.com

Please read the "Sharing of Information" posting. - Click here.

Download loans_for_learning_plan_v100.doc

Sharing of Information about Loans for Learning

It is the express goal of the author to maximise the opportunity for this program to provide positive benefits to as many people and countries as possible. The vision of the program is community based and the motives of organisations involved should not be competitive, except where they lead to greater efficiencies and/or benefit to the students.

With this in mind, all organisations participating in any way with Loans for Learning, either with a pilot program or full implementation, are requested to make their findings available to the author so that they can be circulated to other interested organisations.  Organisations making information available will receive information from other organisations in return. 

It is anticipated that an online repository for these documents and information will be made available as soon as possible. Please contact the author for further information.

Training Centre Research

Download training_centres_research.doc

This document includes some information on some of the training centres in Arusha. It includes costs, course duration, capacity, etc.

Financial Analysis

This document includes some projections and sensitivity analysis based on key variables and assumptions on some constants. Feel free to play with it. If you notice any gaps or weeknesses, let me know.

The spreadsheet has not been updated since December, so there may be some gaps between the plan and the figures. The basics and formulaes will still work though.

Thanks

Download loans_for_learning_analysis_v_016.xls

Loans for Learning: Overview

Loans for Learning is a program whereby financial assistance is provided for people in difficult economic situations which allows them to do vocational training or education. The program hopes to help people who want to increase their skills with an aim to increase their employment opportunites, leading to an improvement of wellbeing for themselves and their families.

The program was developed by M. Liubinskas whilst in Arusha, Tanzania during October 2004 to February 2005.  The program is currently only a proposal, with a detailed plan. The proposal has been distributed to a number of local micro-finance and community support organisations with a view to generating interest in running a pilot program. Funding options for the pilot and full programs are also being developed.

The program was developed with the support of numourous local people and the volunteers from Mondo Challenge.

Loans for Learning: Introduction

This website is dedicated to promoting the Loans for Learning Program. It is aimed to be a central point of communication, distribution, discussion and resources for the program.

Any questions, please add a comment or email me on mliubinskas@hotmail.com

This work was done whilst I was in Arusha, Tanzania, Africa doing work for Tanzanian Captial Boosting Association who provide Microfinance and Grants to small business and HIV/AIDS widows.