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year ago, 22-year-old Muhammad Iqbal tried to obtain a student loan to cover the last semester of his vocational study program at Polytechnic Piksi Ganesha Bandung. He had just quit a part-time shopkeeping job that had supported his studies since 2014, while his father, whom he used to rely on, has already passed away.

A Google search led Iqbal to DANAdidik, a financial technology (fintech) start-up that offers student loans, where he borrowed Rp 4 million (US$290) to pay his tuition and graduation fees.

“They gave me the loan only one week after I applied, and it came with light installments,” he said, referring to monthly payments of Rp 146,000 over 30 months.

Iqbal is one of a growing number of students benefiting from fintech start-ups that focus on student loans.

DANAdidik and some others, such as Dana Cita and Koin Works, stepped up their game in the student loan business way before President Joko “Jokowi” Widodo asked the domestic banking industry in March to create student loan products.

They apparently serve as lenders of last resort when getting scholarships or bank loans is too difficult or complicated for borrowers like Iqbal.

Launched in 2015, DANAdidik provides loans to vocational school and undergraduate students under a crowdfunding system that connects sponsors with those in need of money through an online platform.

DANAdidik director Dipo Satria Ramli said as many as 8,500 students had registered on the platform, but only a few hundred had received the student loans, which range from Rp 2 million to Rp 10 million with tenors of up to four years.

“We prioritize loans for those studying in specific fields, such as health, and at vocational schools, because their employability is higher,” he said.

To access the loans, students only need to meet some requirements, such as verification from their school or campus and families, and submit certain documents, such as identity cards.

The fintech start-up applies two installment mechanisms: one before the students graduate and another after they get jobs.

Under the first scheme, the borrower can repay in monthly installments without any interest rate. By contrast, under the second scheme, they are subject to an income-sharing deal with DANAdidik, which gets 10 to 30 percent of their salary to redeem loans ranging from Rp 2 million to Rp 10 million.

Dana Cita, meanwhile, offers loans not only for undergraduate and vocational school students, but also postgraduate students and those attending short courses.

Established in early 2017, Dana Cita pools funds from both individuals and institutions and has so far provided around US$100,000 to 50 borrowers.

Current or future students who have been accepted by higher education institutions are eligible to apply for the loans. For the latter, the start-up can cover the tuition fees for the entire period of their study.

Borrowers pay interest rates of 12 to 18 percent a year with loan tenors of up to six years, said Dana Cita co-founder Susli Lie.

“We funnel the funds directly to the schools. This system aims to avert misuse of funds by the students,” she said.

The start-up collaborates with 27 educational institutions nationwide, including the University of Indonesia (UI), the Bandung Institute of Technology (ITB) and Bogor Agricultural University (IPB).

Unlike DANAdidik and Data Cita, Koin Works provides student loans under a peer-to-peer lending system, in which borrowers — vocational and undergraduate students — are connected with online funders.

Koin Works’s co-founder Benedicto Haryono said the company had so far assisted 100 students in Greater Jakarta with the necessary funds for their studies.

Koin Works also cooperates with several universities in the area to funnel student loans and allows repayment periods of up to six years with interest rates of 9 percent a year.