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Bangalore: Husband-wife duo set out to disburse loans to 45,000 people

The two are determined to reach out to at least 45,000 unbanked people in the next two years with small ticket loans.

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Ram NK and Smita Ram are just like any other foreign returned techie couple in the city.

But what sets them apart is their ‘co-founder’ credentials.

As co-founders of their startup, the two are determined to reach out to at least 45,000 unbanked people in the next two years with small ticket loans.

“We want to disburse loans to any underprivileged person who wants to start his or her own little income generating activity, or for funding the education of their children,” say Ram and Smita.

Rang De, the non-profit startup they started in 2008, has been giving micro loans averaging Rs 7,000-8,000, to people wanting to start their own enterprises.

Till date the Bannerghatta Road based organisation has reached out to 26,000 borrowers across India, disbursing approximately Rs 19 crore as loans.

“Some of our borrowers have used the loans to start unique businesses like papad making, constructing bird cages, handicraft business, potato chips business,” says Smita.

Conceived in Oxford, where Ram and Smita worked before coming to Bangalore, the Rang De idea took off after the couple watched the Aamir Khan starer Rang De Basanti, and were “inspired to return to the homeland and work in the social sector.”

It was around 2006, and microfinance was a hot topic of discussion, following Bangladesh’s Muhammed Yunus winning the Noble Peace Prize that year for his Grameen Bank.
“That was another big inspiration,” echo Ram and Smita.

Instead of dilly-dallying on entrepreneurial ideas, the duo decided to dive deep into the microfinance sector, taking along the 6,000 pound they had as savings.

“We felt that if 6,000 pounds can get us somewhere, good. Otherwise it’s ok,” says Ram.

After rounds of meetings with veterans from microfinance, legal and social experts; Rang De started in 2008, on Republic Day, giving a loan of Rs 5,000 to a lady from Maharashtra who wanted to start a beauty parlour.

Rang De’s second borrower was also a lady, who took a loan of Rs 7,000 to run her cycle repair shop. In fact, about 95% of our borrowers happen to be women, says Smita, adding that they take the micro loans “for self-sustaining activities and little businesses which ultimately help their children and families.”

The organization disburses loans through its 25 something NGO partners, who screen and bring prospective borrowers. Doling out at a “reasonable” interest rate of 15.3%, the organization has seen a repayment rate of 99%, “which is very good,” says Ram.

The happy-go-lucky couple have plans of scaling up Rang De, by venturing in states like Uttar Pradesh and Bihar. “We also want to lend to differently abled people, artisans. We will need government support since government has great access to the masses,” say Ram and Smita.

The entrepreneurs depend on support from social investors, “rather anyone willing to give any amount to help the unbanked.”

Lending increases
A report by the Microfinance Institutions Network (MFIN) states that disbursal of micro loans increased by 50% in 2012-13, compared to the previous financial year. Containing analysis of data from 42 microfinance companies in India, the report says average micro loan amount across India is Rs 15,000. And lending in states like Uttarakhand, Uttar Pradesh, Punjab and Rajasthan has significantly increased over the years.

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