Sunny Mahant had been working as a product marketing manager for nine years at Cisco when he experienced an epiphany on a trip to India.

On that trip, Mahant and his wife, photographer Geidre Nakutyte, witnessed firsthand the brutish conditions under which very young children work in India, and the extreme poverty suffered by their families. He came home determined to make a difference in the lives of young Indians.

“If we’re going to solve the poverty issue in India, it has to come through education,” Mahant told India-West. “You cannot have a high rate of illiteracy and prosperity at the same time,” he said, noting that three quarters of the country’s population still live in abject poverty, despite India’s double-digit economic growth rate, an inequity he believes is unsustainable over the long term.

More than 35 percent of the world’s illiterate children live in India, according to the organization Pratham, which – with a grant from Google – facilitates the ASER program each year in 19 states in India, to measure the reading and arithmetic levels of seven million children ages 6 to 14. Approximately 65 percent of India’s children are illiterate, notes the organization.

Mahant left Cisco in 2007, and joined the San Francisco, Calif.-based NamasteDirect, where he received hands-on education on microfinance through the organization, which provides small, low-interest loans to women in Guatemala and Mexico to scale up their businesses.

Armed with that knowledge, Mahant went on to found the Janta Foundation, which allows small investors in the U.S. to fund loans to low-income Indian parents, to pay for their children’s education. The Jantaloans.org Web site, which has been in beta and pilot mode, will formally launch late this summer, after clearing financial hurdles in India.

The Indian regulatory system in India is set up to discourage loans from abroad to protect its exchange rates asserted Mahant, noting that few other countries have such restrictions.

The loan program is offered to the parents of primary-school children and those attending vocational school. Mahant said he decided to focus on younger children, rather than college students, as the cost of funding their education is much less, and also provides a basic level of literacy for India’s millions of illiterate children.

“Microlending has enormous potential as a powerful tool for creating access to education in India,” Ray Klinke, CFO and interim CEO of the San Francisco-based Give2Asia, told India-West.

Give2Asia, which harnesses U.S. support for social enterprises in Asia, has partnered with Janta “to create and ensure access to education for the poor,” said Klinke, adding that Janta has developed an innovative model to combat illiteracy.

The Janta model is peer-to-peer: investors in the U.S. can directly pick out a student to fund in India or Nicaragua, and fund all or part of their education. The child stays on the site until he or she is completely funded.

The loans are small: a primary school education in India or Nicaragua costs about $100 to $255 per year for tuition, books, school supplies and uniforms.

The loan is paid back by the child’s parents over two to three years, at an interest rate of one-and-a-half percent per month, which is determined by Janta’s field partners. Mahant said he is contemplating the idea of a loan deferral program, which would allow students to pay back the loans directly after completing their education, when they begin to work.

Janta’s pilot and beta programs have already provided loans to the parents of 140 children in India and Nicaragua, and Mahant believes the program will scale up dramatically – into the thousands - after its formal launch this summer.

“In our minds, there’s almost a limitless supply of students who need these loans,” he said.

The organization will also launch a scholarship program this summer, using the same peer-to-peer model.