The Boom Of Micro Lending In India, And How You Can Fuel Rural Entrepreneurs

Posted on January 16, 2014

By Rajkanya Mahapatra:

Ratna Mondal is a resident of Santipur in West Bengal. She weaves and sells sarees. She has worked for 10 years out of her 600 sq. ft. house and now earns about Rs.5,000/- a month. She has paid off the loans she has taken before and has no outstanding debt. With this loan, she will purchase threads for weaving, and tools (Tana with Maku) required to make weaving faster. Her income will go a long way in supplementing her family income and ensuring that she sells high quality products.” (Source)

Ratna’s loan amount is Rs.12000, she has gotten 50 weeks to return the loan money and the rate of interest is 8.50% p.a. There are more Ratna(s) than you can imagine. There are fish vendors, vegetable sellers, tailors, bangle workers, who need money for their start-ups, to educate their children, to install basic facilities in their households. Milaap and Rangde are two organizations that have been able to successfully help thousands of grass root entrepreneurs in a very short amount of time.


This article doesn’t have to be about numbers and facts, although they are there in abundance. More than 5000 social investors, 27,583 borrowers out of which 94.98% are women borrowers in 17 states. If you translate these figures on, they will tell you a story so beautiful and noble, it might make you want to believe in the world again. To believe in the fact that people who need help, get help. There are more than enough people on and who have ensured along with their field partners and funders that India trots on the path of self-reliance again, this time stronger than the last time, backed with technology, bright minds and good intentions.

What micro financing organizations like Rangde and Milaap actually do is collaborate with grass root level organisations who in turn reach out to people like Ratna who need help to expand their business, a detailed account is put up on the website explaining what the borrower’s conditions are, what he/she needs the money for and then how she plans to use it, the money is raised on the website by ‘social investors’; a social investor can be you, me, or a non-resident Indian. The interest rates are really low (as low as 5% p.a) compared to other micro financing institutions. Organisations like these are mission driven and aim to achieve the social impact that they wanted to, when they had started out.


Sourabh Sharma, Anoj Vishwanathan, Mayukh Choudhary are the founders of  Milaap while Smita Ramakrishna and Ramakrishna NK are the founders of Rangde. I was amazed when I went through their stories as to how ordinarily extraordinary they were. Engineers and Business graduates, who used their knowledge and passion to give shape to these organizations that have now managed to change thousands of lives, raised lakhs of rupees and helped households in the remotest of places. It made me think, every aam aadmi, does not have to form a party to get solutions. Every aam aadmi, like you and me, can make a difference, if we use our knowledge for the right reasons, so that it serves us and our fellow countrymen and propel us into an Indian that looks hopeful.

It is important to notice how good intentions and sharp minds can give rise to ambitious start-ups that mean both business and wellness. It is high time we re-align our priorities as the youth of India, use our knowledge to serve the society, so that we in turn get to live a better life.

When I went through the micro financing index of India, I couldn’t really see much apart from numbers separated by comma(s), they didn’t have a story to tell unlike Milaap and Rangde. I comprehend emotion more than skeletal numbers and when I see an opportunity like this to contribute to the society I live in, I take a step ahead. I am going to lend money, I have decided. You should do it too. If there is anything really COOL (and sensible of course) to do out there, it has to be THIS.

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