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Crowdsourced microlending platform Milaap launches India-focused entrepreneurship development fund
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Singapore and Bangalore-based online microlending platform Milaap has joined hands with a Singapore-based media organisation e27 to launch an entrepreneurship development fund. The crowdsourced fund, targeting a corpus size of S$ 50,000 or $40,000 (Rs 22 lakh), will give out loans to entrepreneurs based in small towns across India.
However, such funding will be disbursed as a loan and not as a donation, and the lenders' contribution would be returned after two years.
At the time of posting this report, Milaap has raised around a third of the targeted corpus, led by its super angels including Mohan Belani (director at e27 and co-founder of Singapore-based mobile social gaming startup Mobret), among others. Other super angels involved with Milaap include Jayesh Parekh (co-founder of Sony Entertainment Television) and Harveen Narulla (Singapore-based entrepreneur who has co-founded GreenPost, a startup engaged in paperless electronic bills aggregation).
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Through this latest initiative, e27 and Milaap seek to back entrepreneurs who lack an efficient support system, such as bank lending, while running small businesses like making hand-crafted items, tailoring and more.
Milaap is a microlending organisation that does fundraising from people and disburses those funds as loans to businesses in India. These loans are fully repaid to the lenders over a period of 12-24 months. However, lenders only get back the principle. Milaap charges an interest rate which is just half of what borrowers would have to pay to a bank and this goes to cover the cost operations for Milaap.
Founded in June 2010, Milaap was co-founded by Sourabh Sharma and Anoj Viswanathan (both graduates from the National University of Singapore), along with Mayukh Choudhury, a post-graduate from IIM-Lucknow. As of November 2011, Milaap had raised $160,000 for borrowers in Karnataka, Tamil Nadu, West Bengal and Maharashtra, with 100 per cent repayment rate, the company said.
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This is the second India-specific crowdfunding initiative launched this month. Two weeks ago, San Francisco-headquartered crowdfunding microlender Kiva launched its first service in India. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lends as little as $25 to individuals. In India, the lender is expected to reach out to 'the underserved and the vulnerable group' through three field partners located in Orissa and Manipur.
(Edited by Sanghamitra Mandal)