The Harvard campus

Harvard, June 14: Cash-strapped Harvard students can now receive small, interest-free loans from alumni to pay their exam fees or buy study material thanks to three young graduates, two of whom are of Indian origin.

Nimay Mehta and Tanuj Parikh, both 21, and Joshua Kushner, 24, founded a website, Unithrive, last month that brings needy Harvard students in direct, personal touch with the university’s deep-pocketed alumni.

The students post photos and biographical information and, for now, can request up to $2,000. Alumni can lend to those with whom they feel a bond.

Brian Feinstein, 24, who graduated in 2007, said he lent $50 to a student on Unithrive because she is from East Longmeadow, Massachusetts, and has the same major he did. “I lived in Longmeadow when I was younger,” Feinstein said. “I found commonalities with her background.”

The appeal of direct peer-to-peer loans, Unithrive’s founders say, lies in this personal connection that alumni feel with current students: those requesting loans list hometowns, majors and classes they have taken.

The students sign a contract agreeing to pay back the no-interest loan within five years of graduation. If they default, this will be reported to credit bureaus and will effect their credit rating, Nimay said.

Tanuj and Nimay both graduated from Harvard College this month, with BAs in government and economics respectively, while Kushner graduated last year. Tanuj, a New Yorker, is now doing an advanced course in government in the university while Nimay is set to join Insight Venture Partners, a venture capital/private equity firm.

Both have been active on the campus. Nimay started the Harvard College Entrepreneurship Forum, dedicated to fostering entrepreneurship on the undergraduate campus, which holds networking and educational events the year round and recently launched a $80,000 business plan competition.

Tanuj, more interested in public sector challenges, is the chair of Harvard’s South Asian Men’s Collective and has helped raised funds for charity and social justice causes. He is interning with the strategic planning department of the New York City Economic Development Corporation.

Both have long believed in the potential of person-to-person lending.

The idea for Unithrive came from the peer-to-peer loan model of online groups like Kiva.org, with which Tanuj had a stint in 2007, doing fieldwork in Kenya. Kiva lets lenders browse profiles of borrowers in the developing world, offering as little as $25 towards projects like helping a farmer buy fertiliser.

Started in 2005, the non-profit Kiva says it now lends about $1 million a week interest-free and that 97.8 per cent of loans are repaid.

The three young men began Unithrive at Harvard because they have a ready pool of alumni friends willing to write checks — the university’s alumni already support a $29 billion endowment that funds scholarships. So far, 73 of them have signed up and lent about $4,500 to nine students in the four weeks since the site went live.

The site is accessible only to those with a Harvard student or alumni email address, but the founders hope it will one day be rolled out to other colleges that cannot match Harvard’s generous scholarships.

Like Kiva, Unithrive uses crowd-financing, which pools a number of lenders to meet an individual’s total request. The loan is to be paid directly to a university as part of a student’s tuition, which will reduce the bill.