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Young Turks Dream Decade talks to an enterprenuer who has offered India's unbanked segment a chance to get a financial identity through Financial Information Network and Operations (FINO).
Social media for social impact that’s the mission at milaap.org. Incubated by IIM Bangalore by a team of entrepreneurs led by Sourabh Sharma in 2010, the website is a lending platform that acts as facilitator between people who want to make a contribution for a social cause and the rural poor. An RBI approved lending platform which allows Milaap to receive funds from lenders from across the world. It collects interest free loans from its lenders and allows them to re-deploy the money, creating a continuous liquidity cycle of investment. In one year milaap.org has raised a USD 140 thousand in loans from 250 registered lenders on its portal.
Sourabh Sharma,Co-founder milaap.org explains, “We provide loans in four major sectors. One is health and sanitation. It involves giving loans for clean drinking water and giving loans for sanitation purposes which is essentially building eco-friendly toilets. We also provide employability loans which are essentially either a higher education loan, typically like a diploma which helps you get a job or a vocational training kind of loan. The third kind of loan is what we call livelihood loans. Livelihood loans are loans given to people who are producing something like a handicraft item or something for people to buy and use and there is a safety net involved with them, where they already have a enterprise or a organization which is buying this produced from them on a constant basis at a fair market price.
Milaap today works with four field partners and has operations across three states. The field partners identify, screen and post micro-loan needs on the portal which is then managed by the team at Milaap. Offering low cost lending milaap.org charges 7% interest on its loans from the borrowers and the venture has impacted 1750 families so far. Sourabh has also been able to raise funding worth USD 200 thousand for the venture from the Singapore government and First Light Ventures.
Sharma elaborates, “All Milaap’s beneficiaries get loans between 12-18% which is 50% your existing micro-finance interest rates. This is made possible because we work with our field partners and we given them the loans at very low interest rates at actually 50% lower than what they would get from a bank. So we give it to the field partners and the filed partners then give it to the borrowers. The end borrowers end up paying between 12-18% which is still much lower than exiting microfinance rates. On the lenders side our pitch is essentially that traditionally the way of doing good for you and me has been- okay I make a donation to organisation which works in child relief, I make a donation to someone who works for the upliftment of the girl child, but it is all a one way street. You never get your money back and there is only so much you can do it in this way. Here what we are saying is that, 100% of your money goes to the end borrower. You know the end borrower to whom which the money is going to. Not only that there is a lot of accountability and transparency.
Catering to the almost insatiable need for micro-lending in India, Milaap hopes to reach out to 2 million people in India with USD 75 million in loans by 2015. Raising awareness about this hybrid online, offline, micro-lending channel, Sharma wants to now introduce milaap to other international NGOs.
“We are also the first online lending portal in the world which is able to get people from all over the world to make a loan, so people sitting in US, Canada, Singapore, anywhere in the world can make a loan as well. What we are also doing in terms of future plans is tying up with lot of corporates so that people, their employees can involve in a payroll lending program. Therefore a certain amount can be given out for such a good directly from their salaries and returned it back to them over a period of one year. So we are trying to target corporates. We are also trying to reach out through TV and through social media also to reach out to anyone and everyone in the world,” Sharma notes.
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