IDB Grants $10 Million Student Loans to Peru

The Inter-American Development Bank (IDB) will help expand the access to higher education in Peru and other five countries in Latin America and the Caribbean by providing a $10 million loan to the Higher Education Finance Fund, L.P. (HEFF), a regional debt fund that seeks to offer student loans through local microfinance organizations.

With total assets of up to $50 million from the IDB and other international institutions, HEFF will provide financing to microfinance institutions under appropriate conditions so they can in turn extend long-term loans to students, allowing them to pay for their studies once they enter the labor market.

During its initial rollout, the program will serve about 3,000 students from Guatemala, Honduras, Dominican Republic, Peru, Bolivia, and Paraguay, where there is a high demand for student credit. There are also excellent prospects for growth in other Latin-American locations as the fund grows and develops.

Student loans, when properly structured, take the education cost burden off the family while the family member is studying. These costs include tuition, books, lodging, food, and transportation and can negatively impact the learner’s ability to succeed if they are forced to work while studying.