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A portal that lures the Mohammed Younus in you….Sreelatha Menon / New Delhi April 8, 2008
You too can make a difference, and turn into a mini Mohammed Younus. This is what the founder of a new social investment forum Rang De claims. Started by Ramakrishna NK, with help from the ICICI Foundation, the forum is a portal whose main objective is to provide support to low cost micro credit. Does low cost micro credit exist? asks Ram. “I have heard of it in seminars but never seen anyone practise it. For it is not feasible,” says Ram. Then he goes on to speak about his dream venture he launched on January 26 this year in true Rang De spirit. This is an investment forum for ordinary people. Ordinary people will invest as less as Rs 1,000 and have a choice of taking it back at the end of a year with interest of 3.5 per cent and with the satisfaction of having helped someone. But it will be channelised through the portal to people serviced by some small but not for profit micro finance institutes (MFI) who have no source of funding and may be forced in future to give up their not for profit model just to survive. He says that a middle-income individual may donate Rs 500 or Rs 1,000 for a cause. But that is all he can do. He cannot do it again and again. But an investor in Rang de can invest again and again, for he only lends the money and can take it back whenever he wants with an interest of 3.5 per cent accruing to his money. So he can always lend the money to the forum again and again says the mechanical engineer . Ram along with wife Smita began to discuss the feasibility of the idea of offering cheap micro credit to small organisations and individuals in need of funds through blogs and found some people in the IT industry who were ready to back them with technology. Of course, that was at a huge price the couple could not have been able to pay. A team which had just stepped out of Infosys and wanted to do something interesting joined hands with the Rams and a deal was struck. The couple had just $6,000 while the engineers wanted $33,000.So the deal was that the couple would pay back the full amount later. The result was Rang De, which is today operational, with some funding from ICICI Foundation. The biggest investor so far has been an acquaintance who has deposited Rs 50,000 in the venture. As for people who have benefited from loans from the portal about 31 people identified by a non-profit micro finance institution CBMD based in Nagpur have received assistance The amount disbursed so far as loans is Rs 1,50,000, says Ram. A new set of 10 people have registered themselves as potential beneficiaries. They are people who have been identified by a non profit MFI Asscod in Karunguhi in Kancheepuram in Tamil Nadu. Another NGO doing not for profit lending Nirantara from Karnataka has also approached Rang de for funds for a beneficiary. The borrowers get the loan for an interest of 8.5 per cent flat. The bottom line of the entire activity is that the target groups are the small non-profit micro credit organisations who unlike the for profit organisations prefer to remain small and confined to a few villages or blocks rather than spread at a rapid pace to increase the funds in hand. The intervention is to make not for profit micro credit a possibility. If MFIs are to get assistance from funding organisations they have to be big. They need a capital of about Rs 2 crore to be considered eligible to become a Non Banking FinancialCompany (NBFC). And only NBFCs can get help from various funding sources. A not for profit MFI is not touched by the many venture capital funds, says Ram. So our venture is to help these organisations help the needy and still remain sustainable, says Ram. Ram is not worried about the legal implications. This is the first ever online micro credit venture. It is a grey area and legal opinion has been sought and we have found that laws don’t cover this territory yet, he says. |