An Indian busi­ness web­site is doing a spe­cial series on Social Entre­pre­neur­ship, which is start­ing busi­ness with the goal of human ben­e­fit instead of only a goal for profit. The lat­est install­ment of the Pluggd.In series has a pro­file of a peer to peer micro­cre­dit web­site. The site Rang De gives indi­vid­u­als the oppor­tu­nity to make the micro­cre­dit loans to low income people.

From PluggdIn.com is this inter­view with Rang De founder, Ram NK.

Rang De is a social busi­ness with a strong focus on becom­ing a sus­tain­able and scal­able busi­ness that pro­vides access to cap­i­tal. Rang De is able to pro­vide micro­cre­dit at low cost as we source social invest­ments from indi­vid­ual investors. The unique propo­si­tion we offer to the social investor is that they have the abil­ity to select an indi­vid­ual bor­rower to whom the money goes to – based on busi­ness activ­ity and geog­ra­phy. Social Investor also has the abil­ity to mon­i­tor the progress made by the bor­rower through a unique well­ness score. Rang De engages with a net­work of grass­root orga­ni­za­tions to help in screen­ing bor­row­ers, dis­burs­ing the loan and col­lect­ing repayments.

While the social investor gets a tan­gi­ble social return and a nom­i­nal finan­cial return of 2% flat p.a. or 3.5% APY, the field part­ners get 5% flat p.a. to cover their oper­a­tional costs. Rang De charges 1% flat p.a. to cover its trans­ac­tion costs. Rang De ensures that the bor­rower pays no more than 8.5% flat p.a. as inter­est towards the loan. There are no hid­den charges or pro­cess­ing fees.
Startup Jour­ney
# What made you start Rang De? And how did you go about it?

The jour­ney started in Decem­ber 2006 when I was giv­ing a seri­ous thought to com­ing back to India after a short stint in the UK. Hav­ing started as a senior con­sul­tant in Vignette and going on to become the Prin­ci­pal Con­sul­tant in the com­pany, I decided that it was time to quit my cor­po­rate career and return to India and do some­thing that is socially rel­e­vant. The desire to do some­thing socially rel­e­vant was always there but did not have the finan­cial means or the know how to take the plunge. After a suc­cess­ful career and a small amount of sav­ings, I thought the time is now or never.Then the ques­tion of what could bring about a sus­tain­able impact in India began to occupy my thoughts. That’s how we decided on doing some­thing in the micro­cre­dit space. Prior to that the other causes that I really wanted to work on were – child labour, domes­tic help and social media.

Some­how, micro­cre­dit seemed to be the most promis­ing as it had the poten­tial to alle­vi­ate poverty on a large scale. Also because the root cause of almost every social prob­lem in India emanates from poverty. Our ini­tial research brought out a star­tling fact: 90% of the total esti­mated demand for micro­cre­dit of Rs. 200,000 cr was still unmet and that 80% of India’s pop­u­la­tion still does not have access to any form of credit.

Rang De was started with a seed fund­ing of 6000 GBP from the founders and uncon­di­tional sup­port from our technology(sen-sei.in) and creative(niyati.com) part­ners. We sub­se­quently received fund­ing from CSO Part­ners – a strate­gic part­ner of ICICI Foundation.

Did you always wanted to be a social entrepreneur?

Yes. Right from my col­lege days, I was involved in get­ting peo­ple together to do some­thing for a social cause. Dur­ing my sec­ond year of engi­neer­ing I orga­nized a fund rais­ing event where we cel­e­brated the birth­days of 40 chil­dren from an orphan­age run by Mis­sion­ar­ies of Char­ity. They were sim­ple acts of char­ity and vol­un­teer­ing. This con­tin­ued dur­ing my pro­fes­sional life as well. I vol­un­teered for NGOs dur­ing week­ends and holidays.

Like

Unlike