Business

Inteview with Rangde.org founder Ram N

About Rang De

RangDe.Org is India’s first online peer to peer micro-lending platform that enables individuals to lend to low income households in India. The mission is to make microcredit affordable and holistic by making it available for business, education and health needs.

RangDe’s Business Model

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.N Ram founder Rang DeN Ram founder of Rang De( on the right) handing over a Rang de T-shirt to a contest winner

    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.

    What were the typical challenges you faced while starting RangDe?

    Like any other startup social business, Rang De too has had fair share of challenges and we continue to face new ones as we look at balancing scale and social returns. Educating people about microcredit and making it a cause has been a challenge. When people understand about microcredit, their tendency to invest is a lot higher and they trust the model.

    The other challenge was to make sure that money does not get misused at any point in the process. So building a process and an audit mechanism at the grassroots level was another challenge. We have cracked this for now and of course the model is evolving with the increase in scale.

    Your first mentors?

    Prof. P Sudarshan has been one of our early mentors and has encouraged us throughout, right from the beginning of Rang De and even before. Mr. Sitaram Rao of SKS Microfinance who recently passed away was another early mentor and a strong supporter.

    Any personal sacrifices, though we understand it brings in a lot of personal satisfaction?

    I would hate to call anything a sacrifice as the satisfaction far outweighs the compromises I have had to make.

    Any support you are receiving from other agencies, Govt, funding houses or corporate
    We have a small network of corporate partners who have been helping us with promotional and awareness building campaigns.

    If possible, please share the total number of social investors/borrowers your system has been able to attract.

    • No. of Borrowers Impacted 1016

    • No. of Social Investors 378

    • Loan Disbursed Rs. 58,02,000.00

    • Total Repaid Rs. 20,41,373.99

    (As of 24 July 2009)

    Impact

    How in your view has your business impacted the lives of the rural people?

    In my view we are just beginning to scratch the surface as the need is just tremendous. However, when we meet people who have taken a Rang De loan it is very evident that it has brought about some amount of relief due to the affordable interest rate.

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