Knocking out Poverty with Peer-to-Peer Lending

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Ram sharing about RangDe's work in Knocking out Poverty with Peer-to-Peer Lending using micro-credit at 2010 ThoughtBerg's Campus Ambassadors boot-camp

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  • Estimated demand of Rs. 200,000 crores
  • Emph
  • Knocking out Poverty with Peer-to-Peer Lending

    1. 1. Knocking out Poverty in India The Campus Ambassadors – Boot Camp 30 Oct 2010
    2. 2. What is Inclusive Growth? “Easy access to finance and markets, health care and quality education across all low income households.”
    3. 3. Kanakamma’s Story A vegetable vendor in Orissa used to borrow from the money lender to sustain her business. What the loan did was to get her into a state of indebtedness.
    4. 4. Kanakamma’s Dream
    5. 5. How close are we to her dream? Business Models in the Social Space Let’s define Microcredit! The Microfinance Movement Measuring Impact? Road to Financial Inclusion? The Rang De Model
    6. 6. Business models in the social space •For-profit social enterprise •“For-profit” social business
    7. 7. Let’s define Microcredit! “Providing collateral free loans to the poor to help them escape poverty”
    8. 8. The Microfinance Movement The Global Context Microcredit is a concept that evolved as early as the 18th century but gained momentum only after the establishment of the Grameen Bank in Bangladesh by Prof. Muhammad Yunus in 1976. By lending amounts as small as $5 to women involved in making bamboo stools in Jobra village out of his own resources, Prof Yunus proved that micro loans can effectively tackle and reduce poverty. Over the years Grameen bank has disbursed several such small loans and assisted poor entrepreneurs to afford low cost credit to improve their small scale business units. The Indian Context The SHG- Bank linkages program initiated by NABARD at around the same time as the evolution of the Grameen Bank. Focussed on group collateral but the emphasis was on savings.
    9. 9. Measuring Impact? •100% Repayment Rates •Social Accounting •Turning a blind eye
    10. 10. Road to Financial Inclusion? •Regulated interest rates •Practices of loan disbursement and collection •Financial Literacy for making an informed choice •Loans for Self- sufficiency and not for indebtedness •Credit Rating for borrowers that will be recognised by banks •Move from dependency to self sufficiency •Access to timely loans
    11. 11. The Rang De Model : an initiative to provide cost-effective microcredit
    12. 12. Rang De – Our vision Our vision is to make poverty history in India by reaching out to underserved communities through microcredit. We do this through a network of committed field partners and social investors and offer microcredit that will have a positive impact on business, education, health and environment of the communities we work with. Rang De – How we are different? •Cost of capital •Sources of funds •Awakening of the civil society •Financial Democracy
    13. 13. Rang De Loans Loans for Businesses These loans are facilitated at a rate of 8.5% flat. Loans are for income generation activities. Around 150 different activities funded so far. Micro Enterprise Loans These loans will be facilitated at a rate of 10% flat. Loans will be facilitated for small businesses. Loan size in excess of Rs.25,000 Partner : 5% Social Investor : 2% Rang De : 1% Contingency Fund : 0.5% Partner : 5% Social Investor : 2% Rang De : 1% Contingency Fund : 0.5% Contingency Fund : 1% Rang De : 2% Partner : 3% Social Investor : 4% Contingency Fund : 1% Rang De : 2% Partner : 3% Social Investor : 4%
    14. 14. Rang De Loans Loans for Primary & Secondary Education Loans are facilitated at a rate of 6% flat. Loans are facilitated to fund school fees, stationery, uniform and other expenses. Loans are facilitated in the form of Education Vouchers. Schools accept education vouchers in lieu of fees, uniforms and other expenses. Partner : 4% Social Investor : 1% Rang De : 1% Contingency Fund : 0% Partner : 4% Social Investor : 1% Rang De : 1% Contingency Fund : 0%
    15. 15. Kanakamma’s Story Loan Availed: Rs. 5000 Loan disbursed in: Feb 2009 Loan Repaid : Feb 2010
    16. 16. Rang De Video: Sow the seeds of change!
    17. 17. Contact UsRamakrishna NK | Co-founder & CEO | www.rangde.org | 97909 67649 | ram@rangde.org | Thank you!

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