Since we began operations in 2010, we have had no borrower defaults on loan repayments
Microcredit Loans made on Milaap are voluntary and are not treated as guaranteed investments and repayments are subject to repayments from borrowers and currency risks.
There are four types of risks involved in lending on Milaap: Borrower Default, Field Partner Default, Currency Risk and Macro Economic and Political Risks. Though, we take strong measures to select our field partners and screen each borrower (and till today we have not had any untoward experiences), we suggest that all lenders recognize the possibility of risk while deciding the loan amount.
Milaap follows strict policy measures to cover all risks to our lenders. Our standards and processes have been laid out with the advice of our highly qualified advisors, who have significant experience in microcredit and financial services.
Our field partners are selected after rigorous due diligence to ensure that they have a grounded understanding of the borrowers needs and capabilities. Our field partners have a strong market presence and over three years of experience interacting with borrowers.
Each field partnership is formed after rigorous due diligence that involves organization visits, financial audits, and borrower interviews. Our field partner evaluation also consists of the following assessment criteria for which we use structured evaluation measures.
Field partner experience in disbursing and managing loans
Field partner policies and practices in borrower selection
The range of projects and borrowers to ensure the risk-spread
The loss reserves they maintain to mitigate the risk of default
Milaap's capacity building tools that include the use of SMS and web-based reporting create transparency and accountability at all stages, further alerting us on any discrepancies in the process.
At Milaap, we generally do not hand out donations to our end borrowers. However, if you do want to make a donation, we urge you to consider our “revolving loan” option. This way, the money that you want to give will benefit multiple borrowers. You just have to check the “Auto Re-lend” box, and we will automatically re-lend your credits to another borrower, chosen on the basis of urgency of need. Your donation will thus be used as a loan for multiple borrowers.
Our corporate and CSR programs adopt a similar approach.
Milaap aims to make your lending experience distinctive on several counts:
Personal: Milaap gives you complete flexibility in choosing the cause and the borrower to lend to.
Transparent: Our lending service facilitates a transparent and reliable transfer of 100% of your loan amount to borrowers.
Accountable: Milaap and its field partners conduct regular checks and are in constant communication with the borrowers to monitor the use of your loan and to give you detailed feedback on the progress and impact.
We also create mechanisms to ensure that the loan you make is used for the intended purpose only. For example, in case of vocational training loans, rather than disbursing cash, Milaap makes a cheque payment to the institute in the name of the borrower/student. Similarly, in case of artisan networks, Milaap pays the supply chain network to provide for raw materials or machines required by the entrepreneur.
Sustainable: 100% of your loan amount is returned to you at the end of the loan cycle.