Online micro-lending startup Milaap today announced that they had received the regulatory nod to become the world’s first online micro-lending platform to enable anyone around the globe to play a part in the social development of India through microcredit. The Milaap team has been working with the regulatory body in India for more than a year now to ensure that the working poor in India can receive low-cost loans from international as well as domestic lenders.
Speaking about this development, Sourabh Sharma, CEO of Milaap, said, “The poor in India end up paying very high interest when they borrow money from microfinance companies because they in turn borrow from banks at commercial rates. Milaap’s ability to allow socially conscious individuals around the world to lend to the poor, drastically reduces the interest rate paid by them.”
Through the Milaap model, individuals can lend as little as Rs. 1,000 or $50 to borrowers. The loans go towards key areas such as sanitation, vocational training and drinking water. The model differs from traditional charity donation as lenders receive full repayment within the stipulated time period. They can also deploy the same loan amount repeatedly for maximum impact.
Other international players such as Kiva (www.kiva.org) and Vittana (www.vittana.org) follow similar crowd-sourcing models. But Milaap holds the unique advantage of sourcing capital for India’s poor from both foreign and domestic lenders. This opens up a whole new segment of people who can pave the way for bringing essential services to the 700 million who live on $2 a day.
Milaap was founded in 2010 by a team of young entrepreneurs from premier institutions in India and Singapore. Its online micro-lending platform (www.milaap.org) enables anyone around the world to lend money to the working poor in India at very low interest rates. The process is simple. Choose a borrower. Make a loan. Get repaid. Recycle. So far, it has raised USD$140,000 for borrowers in Karnataka, Tamil Nadu and Maharashtra with 100% repayment rate till date.