Reaching out to the needy
By Liffy Thomas
Pushpa of Nagpur required a loan of Rs. 5,000 to give her petty shop a facelift. She supplements her income with a coin-operated public phone booth and a tailoring business. Pushpa wants to add groceries to the store, next.
Impressed with the idea of micro-lending, Samarth of Texas Instruments decided to loan a small-scale entrepreneur a sum of Rs. 1,000 for a period of one year, with the assurance that the money would be returned at an interest of 3.5 per cent.
Rang De, a micro-lending platform, is a bridge between Pushpas and Samarths.
The amount meant financial independence for Pushpa, social responsibility for Samarth, and a lot more for Ram N.K. and Smita Ram – the brains behind India’s first online micro-lending platform Rang De.
By using the internet as a medium to connect social investors with needy borrowers, Rang De is true new wave social entrepreneurship. The objective of the non-profit organisation is to aid hundreds of such small scale entrepreneurs with financial stability in Indian villages, semi-urban and urban areas. It went live on the world wide web in true ‘Rang De’ fashion on Republic Day, 2008.
The idea was conceived in December 2006. The couple were on a professional stint in the U.K. – Ram was working with Vignette and Smita was with the local government’s project called ‘Learning Communities in Oxfordshire’.
The Rams have always been involved in volunteering and various community development initiatives. “Child labour, working on special children, farmer crisis … we finally narrowed it to micro-finance after finding that there were no online mediums in India,” they say. Their main objective being: the model should be replicated and launched at a national level.
“We also drew some benchmarks – it should be truly Indian, people should not write it down, there should be recall value and it should call for action,” says Ram, a software consultant who has worked for companies including Satyam Computers.
With Smita’s experience of community work and Ram’s exposure in the software development they set on their entrepreneurial journey. One of their first decisions was registering the domain name. “Rang De (sharing and spreading the colours of joy) had an abstract connotation and spoke of rural India,” says Ram, who coined the name. “In September 2007 I quit my job to devote full-time for Rang De,” says Smita.
Convincing clients in India, spending weekends on Rang De and working extra time despite the geographical difference has all been part of the start-up. Finding Niyati Technologies as their creative partner came as a blessing. The firm gave them a discount of 50 per cent as they were working on a non-profit cause.
The two-day micro finance conference in October 2007 for which the Rams came down to India boosted their confidence. Their posters became the centre of attraction. They got offers of equity from some of the participants at the conference and investors started showing interest.
Later, they were even lucky to win the good will of the ICICI Foundation, which is currently providing support to run its operations for the next one year.
So far Rang De has disbursed loans to 56 borrowers in Maharashtra and Tamil Nadu. Around 38 social investors have supported them. There are a lot more plans and tie-ups in the pipeline. Rang De hopes to break even by the third year.
For further queries log on to www.rangde.org or call them at
(If you are an entrepreneur with a successful business model or know one, write to us at email@example.com). Photo: S.S. Kumar