It's finally happened! After months of slogging, numerous emails and phonecalls, Milaap has finally received the official go-ahead from the RBI - which means we're now the first platform that enables anyone around the world to lend online to India's working poor. Here's the press release:
Bangalore, India, 8 August 2011- Milaapis proud to announce that it has recently become the world’s first online microlending platform to enable anyone around the world to play a part in the social development of India. The Milaap team worked with the regulatory body in India for more than a year 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.
YourStory.in also picked up the story. Thanks, guys.