This Indian Couple Figured How To Help Thousands Of Rural Entrepreneurs With A Small Step

Posted by Smita Ram in #FutureOfWork, Entrepreneurship, Inspiration
December 16, 2016

Adversity often leaves a person with one of these two choices – lose hope and surrender, or find the courage to change things. 31-year old Jayashree – a mother to three young boys – had borne the brunt of domestic abuse, and she chose to fight against her circumstance. Struggling to make ends meet, she took a small loan to start a jewellery business inside her home, and much has changed since then. Today, Jayashree is comfortably able to support her family, and has not one, but two businesses. The signboard outside her home reads “Shweta Jewellery & Tailoring”.

Jayashree, in her workshop

It’s hard to imagine how a loan of 5000 rupees can help change someone’s life. Jayashree, now a micro-entrepreneur, borrowed from Rang De, an online social investing platform that enables individuals like her to take low-risk loans to fund their micro-enterprises. The beauty of it is that the money doesn’t come from a bank or a micro-finance company, but from socially-conscious individuals, such as you and me.

Rang De’s journey started when my husband and I were working in the UK. We had planned to return to India in four years’ time, and do something meaningful in the social sector. But we started hearing disturbing reports of how men and women in Andhra Pradesh, who had taken loans from micro-finance companies, were committing suicide because they could not pay them back. When we dug deeper we realised that the interest rates on those loans were exorbitant – nearly 36 to 40% annually!

We asked ourselves: “Could we not create a platform to connect the haves and have-nots, and enable rural entrepreneurs to access affordable loans?” So just like that we packed our bags, and returned to India, and invested our savings of £6,000 (approx. 5 lakh INR) to set up our venture – Rang De.

Many people thought we were simply wasting our time. No one believed in the power of micro-credit to transform lives. Also, many couldn’t digest the fact that individuals – like you and me — would come forward to help people in remote villages of India. Add to that we had to battle several misconceptions around people from low-income backgrounds. For instance, often people would doubt the credit-worthiness of rural women entrepreneurs. My own misconceptions were dispelled when I started to regularly interact with rural women. For instance, a chance meeting with a Muslim woman from Nagpur, broke my notion that Muslim women aren’t interested in educating their children, or that they are not independent thinkers. She was determined to send her daughter to university, but was not able to secure any education loans. Stories like hers inspired us to also offer low-cost education loans to rural students who wished to attend university.

Smita Ram

There have been a few other challenges along the way. Such as attracting good talent. Skilled technology professionals often shy away from social enterprises because they don’t understand the prospects, or the space. But over these time perceptions, too, have changed. That technology can help enable a pan-India, citizen-driven movement so as to help thousands break out of the cycle of poverty, has inspired many professionals from prominent tech companies to join our journey. Today, Rang De has over 10,000 social investors who have been crucial in disbursing over 50,000 loans. We’ve helped rural entrepreneurs raise over INR 500 million.

On a more personal note, I have been working to change the society’s mindset towards philanthropy. Philanthropy is often understood as something that only the wealthy, or those who are “well-settled” can do. I believe that is not always the case. Last year Siddarth Aggarwal, an IIT graduate and one of our young social Investors (people who lend on the platform) – walked from Fatehpur to Lakshmangarh in Rajasthan, helping us raise 1.59 lakhs INR for a weaving cooperative in Jaisalmer.

Slowly but surely, we are starting to see a shift in attitudes. Our movement has already funded 50,000 micro-entrepreneurs from some of the poorest communities across India, and interestingly over 90% of our borrowers are women.

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