Lending a helping hand

Have you heard of MILAAP (http://www.milaap.org/) ? It's an online platform that enables you to lend to India's working poor. It’s a loan that you extend, a helping hand, not a donation. I wasn't very certain when I made my first loan a few months ago that it'd be returned, so the mail from MILAAP two months later that the first repayment installment by the borrower had been credited to my account brought a smile to my face.The second installment was paid the next month, and I'm now exceedingly confident that the whole amount will be re paid as scheduled. 

The borrower is Veena Prakash, a 28-year old from Byrathi, Karnataka, earning her living as a tailor. She wanted to expand her business making bags, cushions, mats and boxes, and needed Rs 50,000 to invest in machinery which would help her cut down costs by 5%, increase revenue by 8%, and enable her to employ fifteen people, so that the loan wouldn't mean a better life for Veena’s family alone; she would be helping families of fifteen others.

There was Partner involvement from Indus Tree Crafts Foundation, which is a not-for-profit social business that connects artisans and agricultural workers with a niche urban market. I have been a satisfied consumer of Indus Tree products so when I saw that they are Veena's partner, my level of comfort with the idea of making a loan to a completely unknown person increased.

So I and another lender extended a loan to Veena which she will re pay in twenty four months ----the first two installments have already been credited into my MILAAP account, and I can either redeem this credit or re lend to another borrower. Of course, I will re lend this amount because that option is compelling in the simplicity of its logic -----if I keep the entire amount that I originally lent to Veena in circulation, I can help many more Veenas who are looking not for charity but a hand up.

My choice this time is Asma Mistri, a 29 year-old mother living in Bantra village in West Bengal. She is an artisan who earns her living doing zari embroidery on fabric. Her family has no access to electricity, which means they rely on kerosene lamps ,often paying upto thrice the actual price of kerosene. She hopes to install a solar energy system at home with a loan of Rs 10,000 to overcome these problems.

This is how MILAAP works.

Milaap partners with established organizations that have a strong presence at the grass roots and a deep understanding of the 150 million Indian households with no access to water, sanitation, healthcare, education and energy. Milaap and its field partners design customized loan programs and Milaap then shares requirements, backgrounds and photos of all borrowers. The online listing of borrower profiles enables the lender to select the cause and the borrower of his choice and give a loan of minimum USD 50 or Rs 1000. 

Every month, Milaap sends the total loan collected to its various field partners who disburse the loans. Throughout the loan cycle, the field partners regularly monitor the progress of the borrowers and collect repayments from the borrowers. Milaap makes monthly deposits of the repaid loan instalments into the lender's Milaap account. At the end of the loan cycle, the lender can choose to withdraw the repaid loan amount or decide to relend it to another borrower on Milaap. Through re-lending, a small loan goes a long way and gathers impact.

Its so much better than a one time donation, isn't it? Of course, charitable donations have their place, but if the working poor of India can be empowered to become completely self dependent and capable of living their lives with dignity, with access to clean drinking water, sanitation, education and medical care, wouldn't that be so much better?  Can we, the privileged middle class, who have every need taken care of, and still have enough money to splurge on movies,music, books, vacations, gourmet food, luxury brands etc etc not pledge to extend our less fortunate brethren a helping hand ? 

All of us can, notwithstanding inflation and a thousand competing demands,  budget for small loans that go a long way. Lets all do it ! I hope to meet you all on MILAAP !!

            http://www.milaap.org/how-it-works-questions