Last September, Priya Singh, a civil servant with the Indian Revenue Service, was chatting with her Singapore-based friend on the social networking site, Facebook. With Singh’s upcoming birthday, the conversation invariably turned to how she was planning to celebrate. Singh was looking to do something different that year and so her friend told her about Milaap, an online platform that enables ‘regular’ people to lend money to the working poor in select Indian states so that they can access basics like education, clean water, energy and sanitation.

Singh instantly logged on to their website (www.milaap.org). She not only understood their work and the loan management and repayment plan but also saw the kind of women, children and unemployed youth she would be reaching out to if she decided to lend money. Then, as she turned a year older, Singh marked the occasion by extending a loan, which she was sure would help someone, somewhere lead a better life.

Best gift

Says Singh, "I had never imagined that becoming a lender would be such a joyful experience. It was the best birthday gift I could give myself. While I had been donating money and materials off-and-on, helping people who are helping themselves by giving them a loan has been satisfying."

Of course, it is precisely to tap this vast resource pool of socially conscious individuals keen to give back to society that Anoj Vishwanathan, Mayukh Choudhury and Sourabh Sharma got together and set up Milaap in 2010. While Vishwanathan was well versed with micro-financing, having worked with SKS Microfinance, Choudhury had an understanding of the rural poor, as he was engaged in rural electrification programmes in Uttar Pradesh, and Sharma, a Computer Science graduate, brought his considerable business development and IT marketing skills to the group.

When Vishwanathan was attached with SKS Microfinance, he got to see first-hand the kind of difference something as fundamental as solar lighting could make to impoverished households in Odisha. Unfortunately, the solar lanterns were out of their reach as there were no affordable loans available for such products. At the same time, he also observed that there were numerous well-to-do individuals in big cities across India, looking for avenues to make a difference. "There was a need to connect them to those in need and that’s what we do," says Vishwanathan.

Expanding on the Milaap philosophy, Sharma adds, "We believe that everyone, irrespective of gender, should have access to credit that can contribute to an improved standard of living. Therefore, we make it our business to provide small loans to a borrower screened by our partner organisations."

With the Milaap loans, several families across Maharashtra, West Bengal, Tamil Nadu and Karnataka - where the organisation has been working with its field partners, including local NGOs and civil society organisations - have gained access to potable water, have built toilets at home, are now the proud owners of solar lanterns, and have been able to enroll their young children into vocational courses.

This has not only enabled girls and women in rural and peri-urban areas to devote lesser time to the back-breaking activity of water collection, it has also created a safer environment for them - they are no longer forced to defecate in the open, especially at night. In addition, several youngsters have gained employable skills. Easy availability of working capital has also translated into a 20 to 30 per cent rise in income for artisans and craftsmen, while the work of struggling entrepreneurs has taken off.

Sridevi is one such entrepreneur. With a loan of Rs 2 lakh secured through Milaap, this creative woman set up her own handicraft unit, Prateik Creations, in Chamrajpet, Bangalore. A Science graduate, she and her husband had been facing tough times after they lost everything due to some family problems. Almost on the streets with their small daughter, the duo approached Milaap for a loan.

Says Sridevi, "Now I employ 13 women and men, some of them physically-challenged, for a monthly salary ranging from Rs. 3,500 to Rs. 5,000. We make eco-friendly corporate gift items, jewellery and stuffed toys. Of the Rs. 2 lakh loan, I have paid back Rs. 1.2 lakh."

Here’s how Milaap’s credit system works. Lenders can go to the website and register themselves. The next step is to choose a cause; the organisation focuses on six critical issues - education, energy, water, health and sanitation, enterprise and sustainable farming. Payment options include online through PayPal and offline through cheques or electronic fund transfers. A short cycle of 12-24 months (until full repayment) with monthly installments, and the loan is repaid. There’s also the option of re-cycling the credit so that the same amount can benefit multiple borrowers.

Repayment rate

According to Sangameswaran, "Till now, we’ve been fortunate to have had a repayment rate of 100 per cent. We take measures to mitigate the risks involved. Despite this, in the off-chance that there are defaults, our field partners offer a 20 per cent first-loss guarantee." -- WFS