Milaap, a year-old online platform for microfinance in India, has recently been approved by the RBI to go global. This means that the site can now accept loans from donors anywhere in the world, making it the first global platform for microlending.
The site, established in 2010, was set up as a network wherein people interested in promoting sustainable development in India can donate any amount of money towards specific projects. The site allows lenders to browse through various borrowers’ profiles and needs, and to contribute to their specified needs.
Milaap provides these loans at a much lower rate of interest than other available microfinance sources, and does so by collaborating with various field partners. It has already impacted more than 1200 individuals, and hopes to reach over 2 million by 2015. This newest development, which invites the participation of a much wider donor community, will definitely help in achieving this goal.
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.
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